On the recordSeptember 10, 2012
I would like to discuss a provision of the Biggert-Waters Flood Insurance Reform Act of 2012 which reaffirms that private flood insurance can be used to satisfy a mandatory purchase requirement. This provision defines the term ``private flood insurance,'' and the definition makes a specific reference to private flood insurance from a surplus lines insurer in connection with nonresidential commercial property coverage. I would note, however, that insurance provided by surplus lines insurers also can cover residential properties--particularly when licensed and admitted insurers are unwilling or unable to provide the desired coverage--and this is authorized under state insurance law. The provision defines private flood insurance to include insurance provided by an insurer ``licensed, admitted, or otherwise approved'' to engage in the business of insurance by a State. Surplus lines insurers, also sometimes known as nonadmitted insurers, are approved to conduct such business by States. Is it the understanding of the Chairman that the ``private flood insurance'' definition includes surplus lines flood insurance coverage?
