Flood Insurance Market Parity and Modernization 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. Short title This Act may be cited as the Flood Insurance Market Parity and Modernization Act 2. Private flood insurance (a) Mandatory purchase requirement (1) In general Section 102 of the Flood Disaster Protection Act of 1973 ( 42 U.S.C. 4012a Sec. 102. (a) 102. (a) After the expiration of sixty days following the date of enactment of this Act, no Federal officer or agency shall approve any financial assistance for acquisition or construction purposes for use in any area that has been identified by the Administrator as an area having special flood hazards and in which the sale of flood insurance has been made available under the National Flood Insurance Act of 1968, unless the building or mobile home and any personal property to which such financial assistance relates is covered by flood insurance: Provided, Provided further, (b) Requirement for mortgage loans (1) Regulated lending institutions Each Federal entity for lending regulation (after consultation and coordination with the Financial Institutions Examination Council established under the Federal Financial Institutions Examination Council Act of 1974) shall by regulation direct regulated lending institutions not to make, increase, extend, or renew any loan secured by improved real estate or a mobile home located or to be located in an area that has been identified by the Administrator as an area having special flood hazards and in which flood insurance has been made available under the National Flood Insurance Act of 1968, unless the building or mobile home and any personal property securing such loan is covered for the term of the loan by flood insurance: Provided, (2) Federal agency lenders (A) In general A Federal agency lender may not make, increase, extend, or renew any loan secured by improved real estate or a mobile home located or to be located in an area that has been identified by the Administrator as an area having special flood hazards and in which flood insurance has been made available under the National Flood Insurance Act of 1968, unless the building or mobile home and any personal property securing such loan is covered for the term of the loan by flood insurance in accordance with paragraph (1). Each Federal agency lender may issue any regulations necessary to carry out this paragraph. Such regulations shall be consistent with and substantially identical to the regulations issued under paragraph (1). (B) Requirement to accept flood insurance Each Federal agency lender shall accept flood insurance as satisfaction of the flood insurance coverage requirement under subparagraph (A) if the flood insurance coverage meets the requirements for coverage under that subparagraph. (3) Government-sponsored enterprises for housing The Federal National Mortgage Association and the Federal Home Loan Mortgage Corporation shall implement procedures reasonably designed to ensure that, for any loan that is— (A) secured by improved real estate or a mobile home located in an area that has been identified, at the time of the origination of the loan or at any time during the term of the loan, by the Administrator as an area having special flood hazards and in which flood insurance is available under the National Flood Insurance Act of 1968, and (B) purchased by such entity, the building or mobile home and any personal property securing the loan is covered for the term of the loan by flood insurance in the amount provided in paragraph (1). The Federal National Mortgage Association and the Federal Home Loan Mortgage Corporation shall accept flood insurance as satisfaction of the flood insurance coverage requirement under paragraph (1) if the flood insurance coverage provided meets the requirements for coverage under that paragraph. (4) Applicability (A) Existing coverage Except as provided in subparagraph (B), paragraph (1) shall apply on the date of enactment of the Riegle Community Development and Regulatory Improvement Act of 1994. (B) New coverage Paragraphs (2) and (3) shall apply only with respect to any loan made, increased, extended, or renewed after the expiration of the 1-year period beginning on the date of enactment of the Riegle Community Development and Regulatory Improvement Act of 1994. Paragraph (1) shall apply with respect to any loan made, increased, extended, or renewed by any lender supervised by the Farm Credit Administration only after the expiration of the period under this subparagraph. (C) Continued effect of regulations Notwithstanding any other provision of this subsection, the regulations to carry out paragraph (1), as in effect immediately before the date of enactment of the Riegle Community Development and Regulatory Improvement Act of 1994, shall continue to apply until the regulations issued to carry out paragraph (1) as amended by section 522(a) of such Act take effect. (5) Rule of construction Except as otherwise specified, any reference to flood insurance in this section shall be considered to include Federal flood insurance and private flood insurance. (6) Definitions (A) Flood insurance In this section, the term flood insurance (i) Federal flood insurance; and (ii) private flood insurance. (B) Other definitions In this section— (i) the term Federal flood insurance 42 U.S.C. 4001 et seq. (ii) the term private flood insurance (I) is issued by an insurance company that is— (aa) licensed, admitted, or otherwise approved to engage in the business of insurance in the State in which the insured building is located, by the insurance regulator of that State; or (bb) eligible as a nonadmitted insurer to provide insurance in the home State of the insured, in accordance with sections 521 through 527 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (15 U.S.C. 8201 through 8206); (II) is issued by an insurance company that is not otherwise disapproved as a surplus lines insurer by the insurance regulator of the State in which the property to be insured is located; and (III) provides flood insurance coverage that complies with the laws and regulations of that State; and (iii) the term State . (2) Technical and conforming amendment Section 1364(a)(3)(C) of the National Flood Insurance Act of 1968 ( 42 U.S.C. 4104a(a)(3)(C) , as required under section 102(b)(6) of the Flood Disaster Protection Act of 1973 ( 42 U.S.C. 4012a(b)(6) (b) Effect of private flood insurance coverage on continuous coverage requirements Section 1308 of the National Flood Insurance Act of 1968 ( 42 U.S.C. 4015 (n) Effect of private flood insurance coverage on continuous coverage requirements For purposes of applying any statutory, regulatory, or administrative continuous coverage requirement, including under section 1307(g)(1), the Administrator shall consider any period during which a property was continuously covered by private flood insurance (as defined in section 102(b)(6) of the Flood Disaster Protection Act of 1973 ( 42 U.S.C. 4012a(b)(6) .

Summary: Flood Insurance Market Parity and Modernization Act This bill amends the Flood Disaster Protection Act of 1973 to make technical amendments to requirements for flood insurance under either the federal program or private flood insurance. "Private flood insurance" shall include any policy issued by an insurance company eligible as a nonadmitted insurer to provide flood insurance in the state or jurisdiction where the property to be insured is located. The flood insurance program under the Act, including both private and federal flood insurance, shall extend to Puerto Rico, Guam, the Northern Mariana Islands, the Virgin Islands, and American Samoa. The National Flood Insurance Act of 1968 is amended to direct the Federal Emergency Management Agency to consider any period during which a property was continuously covered by private flood insurance to be a period of continuous insurance coverage.