Not long after the House passed legislation that included a provision to allow private flood insurance policies to satisfy flood coverage requirements, the Senate sidetracked the flood policy measure.
The flood insurance policy provision (known as Ross-Castor) was inserted in a bill (H.R.3823) that had to do with reauthorizing the Federal Aviation Administration’s operation, which was set to expire Sept. 30.
Lawmakers also attached measures on tax relief for hurricane victims and several public health insurance programs in addition to the flood insurance reform to the FAA bill.
After the House passed the measure, Democrats pressured the Senate to strip the flood policy language before the upper chamber passed it and sent it back to the House for its agreement. The House then approved the FAA and tax relief measure by acclamation without the flood insurance language.
The bill has been sent to President Trump for his signature. In the past Trump has said he wants to deregulate and privatize the FAA.
The flood insurance provision was the Flood Insurance Market Parity and Modernization Act (HR 1422), sponsored by Reps. Dennis Ross (R-Fla.) and Kathy Castor (D-Fla.). The bill would give private insurers and state regulators more flexibility in what private policies satisfy the requirement that properties in flood zones have insurance. Currently, the vast majority of policies are those provided by the government’s National Flood Insurance Program (NFIP), not private insurers. The Ross-Castor passed the House 264-155 this session and has been approved by the House in the past.
Senate Democrats said they opposed Republican attempts to add what they felt were unrelated items on flood insurance and public health insurance programs to the FAA reauthorization. They succeeded in removing the flood insurance language from the FAA bill.
Democrats argued that the flood insurance should be dealt with separately from the FAA and that the particular House measure inserted in the bill would allow private carriers to “cherry pick” low risk policies, leaving the already in-debt NFIP with all of the high risk policies and its $25 billion debt.
According to Bloomberg BNA, Sen. Bill Nelson (D-Fla.) as well as Sen. Sherrod Brown (D-Ohio), the ranking member on the Senate banking panel that handles flood insurance bills, criticized the House provision.
“We’re not going to do it,” Brown said, according to Bloomberg BNA. “This would undermine all of our flood insurance efforts. It will cause all kinds of cherry-picking by private insurance.”
House Financial Services Chair Jeb Hensarling (R- Tex.), who has been pushing for reform of the NFIP, was disappointed the Senate pulled the flood insurance provision. He issued the following statement to Insurance Journal:
“The day the NFIP confirms it needs another taxpayer-funded bailout is sadly the very same day the Senate is letting an opportunity slip through its fingers to give flood victims and homeowners better and more affordable flood insurance options. The Ross-Castor bill passed the House 419-0 last year and the Financial Services Committee 58-0 just a few months ago. You can’t get any more bipartisan. To claim it is somehow ‘controversial’ doesn’t make any sense,” Hensarling said.
Hensarling’s committee has passed seven different flood insurance measures that await further action.
The tax relief portion of the bill eliminates the rule that personal losses qualify for a deduction only after they exceed 10 percent of income. It also waives penalties for early access to retirement plans for hurricane victims and lifts the cap on tax deductions for hurricane relief donations. It also creates a tax credit for employers in areas hit by recent hurricanes of up to $6,000 per employee.
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