United States

Extension and changes to the National Flood Insurance Program


On June 12, 2019, the House Financial Services Committee passed the National Flood Insurance Program (NFIP) Reauthorization Act of 2019. The bill extends the NFIP through Sept. 30, 2024. The bill also addresses the following reforms to the program:

  • Addresses the affordability of flood insurance, including means-tested discounted rates for flood insurance coverage for eligible households.
  • Expands and updates flood mapping, including a pilot program that issues grants to units of local governments to enhance the mapping of urban flood-associated property damage and the availability of such mapped data to homeowners, businesses, and units of local government to enable them to minimize the risk of flooding.
  • Provides for continuous coverage with no penalty or gap in coverage, this is in reference to coverage to or from private flood insurance market and the NFIP. 

Other flood insurance-related bills have been proposed to address the following, via bill H.R. 3111:

  • Provide for enhancements to the NFIP claims process, which includes an appeals process for denied and disallowed claims. The bill proposes a deadline of 120 days to make a determination on claims. 
  • Reinstate the prudential regulators’ questions and answers on NFIP compliance, within 12 months of passage.
  • Require regular updates to the guidance, a minimum of every two years.

The changes to the NFIP and extension of the program have been well received by the industry. Although the National Flood Insurance Program Reauthorization Act of 2019 and H.R. 3111 have yet to be signed into law, the general consensus is that these changes to the flood insurance program will come within the year. Financial institutions should be aware of the coming changes, and consider updating policies and procedures where appropriate. Financial institutions that lend in areas more susceptible to flooding should consider material impacts to potential mapping changes and the effects of the continuous coverage may have on the financial institution.