IIB 

114TH CONGRESS 

2D SESSION H. R. 2901 

IN THE SENATE OF THE UNITED STATES 

MAY 9, 2016 

Received; read twice and referred to the Committee on Banking, Housing, and 

Urban Affairs 

AN ACT 

To amend the Flood Disaster Protection Act of 1973 to 

require that certain buildings and personal property be 

covered by flood insurance, and for other purposes. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 


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1 SECTION 1. SHORT TITLE. 

2 This Act may be cited as the ‘‘Flood Insurance Mar3 ket Parity and Modernization Act’’. 

4 SEC. 2. PRIVATE FLOOD INSURANCE. 

5 (a) MANDATORY PURCHASE REQUIREMENT.— 

6 (1) AMOUNT AND TERM OF COVERAGE.—Sec7 tion 102 of the Flood Disaster Protection Act of 

8 1973 (42 U.S.C. 4012a) is amended by striking 

9 ‘‘Sec. 102. (a)’’ and all that follows through the end 

10 of subsection (a) and inserting the following: 

11 ‘‘SEC. 102. (a) AMOUNT AND TERM OF COVERAGE.— 

12 After the expiration of sixty days following the date of en13 actment of this Act, no Federal officer or agency shall ap14 prove any financial assistance for acquisition or construc15 tion purposes for use in any area that has been identified 

16 by the Administrator as an area having special flood haz17 ards and in which the sale of flood insurance has been 

18 made available under the National Flood Insurance Act 

19 of 1968, unless the building or mobile home and any per20 sonal property to which such financial assistance relates 

21 is covered by flood insurance: Provided, That the amount 

22 of flood insurance (1) in the case of Federal flood insur23 ance, is at least equal to the development or project cost 

24 of the building, mobile home, or personal property (less 

25 estimated land cost), the outstanding principal balance of 

26 the loan, or the maximum limit of Federal flood insurance 


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1 coverage made available with respect to the particular type 

2 of property, whichever is less; or (2) in the case of private 

3 flood insurance, is at least equal to the development or 

4 project cost of the building, mobile home, or personal 

5 property (less estimated land cost), the outstanding prin6 cipal balance of the loan, or the maximum limit of Federal 

7 flood insurance coverage made available with respect to 

8 the particular type of property, whichever is less: Provided 

9 further, That if the financial assistance provided is in the 

10 form of a loan or an insurance or guaranty of a loan, the 

11 amount of flood insurance required need not exceed the 

12 outstanding principal balance of the loan and need not be 

13 required beyond the term of the loan. The requirement 

14 of maintaining flood insurance shall apply during the life 

15 of the property, regardless of transfer of ownership of such 

16 property.’’. 

17 (2) REQUIREMENT FOR MORTGAGE LOANS.— 

18 Subsection (b) of section 102 of the Flood Disaster 

19 Protection Act of 1973 (42 U.S.C. 4012a(b)) is 

20 amended— 

21 (A) by striking the subsection designation 

22 and all that follows through the end of para23 graph (5) and inserting the following: 

24 ‘‘(b) REQUIREMENT FOR MORTGAGE LOANS.— 


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1 ‘‘(1) REGULATED LENDING INSTITUTIONS.— 

2 Each Federal entity for lending regulation (after 

3 consultation and coordination with the Financial In4 stitutions Examination Council established under the 

5 Federal Financial Institutions Examination Council 

6 Act of 1974) shall by regulation direct regulated 

7 lending institutions not to make, increase, extend, or 

8 renew any loan secured by improved real estate or 

9 a mobile home located or to be located in an area 

10 that has been identified by the Administrator as an 

11 area having special flood hazards and in which flood 

12 insurance has been made available under the Na13 tional Flood Insurance Act of 1968, unless the 

14 building or mobile home and any personal property 

15 securing such loan is covered for the term of the 

16 loan by flood insurance: Provided, That the amount 

17 of flood insurance (A) in the case of Federal flood 

18 insurance, is at least equal to the outstanding prin19 cipal balance of the loan or the maximum limit of 

20 Federal flood insurance coverage made available 

21 with respect to the particular type of property, 

22 whichever is less; or (B) in the case of private flood 

23 insurance, is at least equal to the outstanding prin24 cipal balance of the loan or the maximum limit of 

25 Federal flood insurance coverage made available 


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1 with respect to the particular type of property, 

2 whichever is less. 

3 ‘‘(2) FEDERAL AGENCY LENDERS.— 

4 ‘‘(A) IN GENERAL.—A Federal agency 

5 lender may not make, increase, extend, or 

6 renew any loan secured by improved real estate 

7 or a mobile home located or to be located in an 

8 area that has been identified by the Adminis9 trator as an area having special flood hazards 

10 and in which flood insurance has been made 

11 available under the National Flood Insurance 

12 Act of 1968, unless the building or mobile home 

13 and any personal property securing such loan is 

14 covered for the term of the loan by flood insur15 ance in accordance with paragraph (1). Each 

16 Federal agency lender may issue any regula17 tions necessary to carry out this paragraph. 

18 Such regulations shall be consistent with and 

19 substantially identical to the regulations issued 

20 under paragraph (1). 

21 ‘‘(B) REQUIREMENT TO ACCEPT FLOOD IN22 SURANCE.—Each Federal agency lender shall 

23 accept flood insurance as satisfaction of the 

24 flood insurance coverage requirement under 

25 subparagraph (A) if the flood insurance covVerDate Sep 11 2014 23:45 May 09, 2016 Jkt 059200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H2901.RFS H2901

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1 erage meets the requirements for coverage 

2 under that subparagraph. 

3 ‘‘(3) GOVERNMENT-SPONSORED ENTERPRISES

4 FOR HOUSING.—The Federal National Mortgage As5 sociation and the Federal Home Loan Mortgage 

6 Corporation shall implement procedures reasonably 

7 designed to ensure that, for any loan that is— 

8 ‘‘(A) secured by improved real estate or a 

9 mobile home located in an area that has been 

10 identified, at the time of the origination of the 

11 loan or at any time during the term of the loan, 

12 by the Administrator as an area having special 

13 flood hazards and in which flood insurance is 

14 available under the National Flood Insurance 

15 Act of 1968, and 

16 ‘‘(B) purchased or guaranteed by such en17 tity, 

18 the building or mobile home and any personal prop19 erty securing the loan is covered for the term of the 

20 loan by flood insurance in the amount provided in 

21 paragraph (1). The Federal National Mortgage As22 sociation and the Federal Home Loan Mortgage 

23 Corporation shall accept flood insurance as satisfac24 tion of the flood insurance coverage requirement 

25 under paragraph (1) if the flood insurance coverage 


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1 provided meets the requirements for coverage under 

2 that paragraph and any requirements established by 

3 the Federal National Mortgage Association or the 

4 Federal Home Loan Corporation, respectively, relat5 ing to the financial strength of private insurance 

6 companies from which the Federal National Mort7 gage Association or the Federal Home Loan Mort8 gage Corporation will accept private flood insurance, 

9 provided that such requirements shall not affect or 

10 conflict with any State law, regulation, or procedure 

11 concerning the regulation of the business of insur12 ance. 

13 ‘‘(4) APPLICABILITY.— 

14 ‘‘(A) EXISTING COVERAGE.—Except as 

15 provided in subparagraph (B), paragraph (1) 

16 shall apply on the date of enactment of the Rie17 gle Community Development and Regulatory 

18 Improvement Act of 1994. 

19 ‘‘(B) NEW COVERAGE.—Paragraphs (2) 

20 and (3) shall apply only with respect to any 

21 loan made, increased, extended, or renewed 

22 after the expiration of the 1-year period begin23 ning on the date of enactment of the Riegle 

24 Community Development and Regulatory Im25 provement Act of 1994. Paragraph (1) shall 


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1 apply with respect to any loan made, increased, 

2 extended, or renewed by any lender supervised 

3 by the Farm Credit Administration only after 

4 the expiration of the period under this subpara5 graph. 

6 ‘‘(C) CONTINUED EFFECT OF REGULA7 TIONS.—Notwithstanding any other provision of 

8 this subsection, the regulations to carry out 

9 paragraph (1), as in effect immediately before 

10 the date of enactment of the Riegle Community 

11 Development and Regulatory Improvement Act 

12 of 1994, shall continue to apply until the regu13 lations issued to carry out paragraph (1) as 

14 amended by section 522(a) of such Act take ef15 fect. 

16 ‘‘(5) RULE OF CONSTRUCTION.—Except as oth17 erwise specified, any reference to flood insurance in 

18 this section shall be considered to include Federal 

19 flood insurance and private flood insurance. Nothing 

20 in this subsection shall be construed to supersede or 

21 limit the authority of a Federal entity for lending 

22 regulation, the Federal Housing Finance Agency, a 

23 Federal agency lender, the Federal National Mort24 gage Association, or the Federal Home Loan Mort25 gage Corporation to establish requirements relating 


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1 to the financial strength of private insurance compa2 nies from which the entity or agency will accept pri3 vate flood insurance, provided that such require4 ments shall not affect or conflict with any State law, 

5 regulation, or procedure concerning the regulation of 

6 the business of insurance.’’; and 

7 (B) by striking paragraph (7) and insert8 ing the following new paragraph: 

9 ‘‘(7) DEFINITIONS.—In this section: 

10 ‘‘(A) FLOOD INSURANCE.—The term ‘flood 

11 insurance’ means— 

12 ‘‘(i) Federal flood insurance; and 

13 ‘‘(ii) private flood insurance. 

14 ‘‘(B) FEDERAL FLOOD INSURANCE.—the 

15 term ‘Federal flood insurance’ means an insur16 ance policy made available under the National 

17 Flood Insurance Act of 1968 (42 U.S.C. 4001 

18 et seq.). 

19 ‘‘(C) PRIVATE FLOOD INSURANCE.—The 

20 term ‘private flood insurance’ means an insur21 ance policy that— 

22 ‘‘(i) is issued by an insurance com23 pany that is— 

24 ‘‘(I) licensed, admitted, or other25 wise approved to engage in the busiVerDate Sep 11 2014 23:45 May 09, 2016 Jkt 059200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\H2901.RFS H2901

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1 ness of insurance in the State in 

2 which the insured building is located, 

3 by the insurance regulator of that 

4 State; or 

5 ‘‘(II) eligible as a nonadmitted 

6 insurer to provide insurance in the 

7 home State of the insured, in accord8 ance with sections 521 through 527 of 

9 the Dodd-Frank Wall Street Reform 

10 and Consumer Protection Act (15 

11 U.S.C. 8201 through 8206); 

12 ‘‘(ii) is issued by an insurance com13 pany that is not otherwise disapproved as 

14 a surplus lines insurer by the insurance 

15 regulator of the State in which the prop16 erty to be insured is located; and 

17 ‘‘(iii) provides flood insurance cov18 erage that complies with the laws and reg19 ulations of that State. 

20 ‘‘(D) STATE.—The term ‘State’ means any 

21 State of the United States, the District of Co22 lumbia, the Commonwealth of Puerto Rico, 

23 Guam, the Northern Mariana Islands, the Vir24 gin Islands, and American Samoa.’’. 


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1 (b) EFFECT OF PRIVATE FLOOD INSURANCE COV2 ERAGE ON CONTINUOUS COVERAGE REQUIREMENTS.— 

3 Section 1308 of the National Flood Insurance Act of 1968 

4 (42 U.S.C. 4015) is amended by adding at the end the 

5 following: 

6 ‘‘(n) EFFECT OF PRIVATE FLOOD INSURANCE COV7 ERAGE ON CONTINUOUS COVERAGE REQUIREMENTS.— 

8 For purposes of applying any statutory, regulatory, or ad9 ministrative continuous coverage requirement, including 

10 under section 1307(g)(1), the Administrator shall consider 

11 any period during which a property was continuously cov12 ered by private flood insurance (as defined in section 

13 102(b)(7) of the Flood Disaster Protection Act of 1973 

14 (42 U.S.C. 4012a(b)(7))) to be a period of continuous cov15 erage.’’. 

Passed the House of Representatives April 28, 2016. 

Attest: KAREN L. HAAS, 

Clerk. 


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