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) Amount and term of coverage Section 102 of the Flood Disaster Protection Act of 1973 ( 42 U.S.C. 4012a Sec. 102. (a) 102. (a) Amount and term of coverage 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 ( 42 U.S.C. 4001 Provided, Provided further, . (2) Requirement for mortgage loans Subsection (b) of section 102 of the Flood Disaster Protection Act of 1973 ( 42 U.S.C. 4012a(b) (A) by striking the subsection designation and all that follows through the end of paragraph (5) and inserting the following: (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 ( 12 U.S.C. 3301 42 U.S.C. 4001 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 ( 42 U.S.C. 4001 (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 ( 42 U.S.C. 4001 (B) purchased or guaranteed 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 and any requirements established by the Federal National Mortgage Association or the Federal Home Loan Corporation, respectively, relating to the financial strength of private insurance companies from which the Federal National Mortgage Association or the Federal Home Loan Mortgage Corporation will accept private flood insurance, provided that such requirements shall not affect or conflict with any State law, regulation, or procedure concerning the regulation of the business of insurance. (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 ( 12 U.S.C. 4701 (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 ( 12 U.S.C. 4701 (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 ( 12 U.S.C. 4701 (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. Nothing in this subsection shall be construed to supersede or limit the authority of a Federal entity for lending regulation, the Federal Housing Finance Agency, a Federal agency lender, the Federal National Mortgage Association, or the Federal Home Loan Mortgage Corporation to establish requirements relating to the financial strength of private insurance companies from which the entity or agency will accept private flood insurance, provided that such requirements shall not affect or conflict with any State law, regulation, or procedure concerning the regulation of the business of insurance. ; and (B) by striking paragraph (7) and inserting the following new paragraph: (7) Definitions In this section: (A) Flood insurance The term flood insurance (i) Federal flood insurance; and (ii) private flood insurance. (B) Federal flood insurance the term Federal flood insurance 42 U.S.C. 4001 (C) Private flood insurance The term private flood insurance (i) is issued by an insurance company that is— (I) 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 (II) 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 (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. (D) State The term State . (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)(7) of the Flood Disaster Protection Act of 1973 ( 42 U.S.C. 4012a(b)(7) .

Summary: Flood Insurance Market Parity and Modernization Act This bill amends the Flood Disaster Protection Act of 1973 to revise requirements for federal and private flood insurance. This bill revises the financial requirements that apply to flood insurance for home loans or loan guarantees by the Federal National Mortgage Association (Fannie Mae) and the Federal Home Loan Mortgage Corporation (Freddie Mac). Private flood insurance must meet any financial strength requirements set forth by Fannie Mae and Freddie Mac. Private flood insurance may include nonadmitted insurers (including surplus lines insurance) as long as the insurer is eligible to provide insurance in the home state of the insured and complies with the laws and regulations of that state. The National Flood Insurance Act of 1968 is amended to direct the Federal Emergency Management Agency (FEMA) to consider any period during which a property was continuously covered by private flood insurance to be a period of continuous insurance coverage, including for the purposes of National Flood Insurance Program subsidies.