Commentary: Congressman Pearce issued the following statement after the House passed H.R. 2901, the Flood Insurance Market Parity and Modernization Act, a bill that would clarify the Flood Disaster Protection Act to give consumers more options when purchasing flood insurance:
“Since the 1970s, the federal government has mandated millions of Americans nationwide purchase flood insurance. To make matters worse, confusing and complicated regulation stifles competition and choice driving the majority of families to purchase an insurance plan through the government. This has led to many areas of the country, such as New Mexico, to brunt the cost of a one size fits all federal mandate to cover the damages and losses in actual high risk areas, such as the Gulf Coast. H.R. 2901 clarifies that private companies may offer plans to satisfy the mandatory coverage requirement. Competition in the insurance market provides more choices for families and ultimately drives down costs so New Mexicans can insure their property without breaking the bank,” said Congressman Steve Pearce.
Currently, the National Flood Insurance Program (NFIP) is $23 billion dollars in debt, with a temporary borrowing authority of $30 billion. Another major catastrophe, like Hurricanes Katrina or Sandy, could permanently cripple the program. H.R. 2901, the “Flood Insurance Market Parity and Modernization Act of 2015” is a bipartisan measure that amends the Flood Disaster Protection Act to clarify that private companies outside of the National Flood Insurance Program (NFIP) meet the mandatory requirement for flood insurance for properties in high-risk areas.