National Flood Insurance Program

Position

• ICBA strongly supports a long-term reauthorization of the National Flood Insurance Program (NFIP), which continues to provide critical support to community banks by providing affordable, reliable flood insurance for both residential and commercial properties securing both consumer and business loans.
• Flood insurance must be affordable and reasonably available to all homeowners and commercial policyholders.
• The program must be managed in a fiscally responsible and actuarily sound way.
• ICBA supports efforts to increase the role of private insurers in the flood insurance market.
• Banks must not be required to review and approve private flood insurance policies and must not be held liable for policies that are not adequate.
• The community bank escrow exemption must be maintained.
• The Federal Emergency Management Agency (FEMA) should coordinate with the Federal Housing Finance Agency, FDIC, OCC, Federal Reserve and NCUA to address concerns regarding financial institution compliance with the mandatory purchase requirement.
• ICBA opposes increasing the civil monetary penalties for noncompliance with the mandatory purchase requirement until all maps are accurate and up to date.
• ICBA supports increasing the size of the risk pool to provide more risk diversity and increase premium revenue to the program.
• ICBA opposes any exemption of commercial properties from the mandatory purchase requirement.

Background

Congress created the National Flood Insurance Program (NFIP) in 1968 to help property owners protect themselves financially from the risk of flooding at a time when flood insurance was not readily available in the private market.

Congress needs to strike a balance between setting the program on sound financial footing and making sure that rates are affordable for the homeowners and businesses who depend on flood insurance coverage.

ICBA will advocate for community bank priorities in NFIP reform and above all ensure there is no lapse in the program that would disrupt the market and delay loan closures.

Helpful Links

• "Why Do I Need Flood Insurance?" Brochure
• "Your Homeowners Insurance Does Not Cover Flooding" Palm Card
• "Protect Your New Home" Fact Sheet
• NFIP Fact Sheet
• "The Preferred Risk Policy for Homeowners and Renters" Brochure
• Interagency Webinar on Private Flood Insurance Rule (June 18, 2019)