Commentary: How Florida’s Flood Insurance Model Could Work Nationwide

While Congress works on various reforms to the
National Flood Insurance Program (NFIP), the
time is ripe for the private insurance market to
step up and play a greater role in providing
Americans needed flood coverage.
Last month in Salt Lake City, the National
Conference of Insurance Legislators (NCOIL), a
group of state lawmakers from around the
nation, began taking a closer look at Florida’s
model flood insurance regulation to see if it
can be used successfully to encourage a
vibrant private market in all 50 states.


Those of us from Florida know the success it’s
had here: The number of private companies
offering flood insurance has more than doubled
in the past two years ( from 10 companies in
2016 to 25 companies as of the end of July ,
according to the Florida Office of Insurance
Companies are also offering better pricing.
Consumers are saving significant money
through these private market alternatives.
The concept behind the Florida legislation is
the old adage, “if you build it, they will come.”
Earlier this summer, a team of us worked with
Florida Rep. David Santiago (R-Deltona) and
Senator Jeff Brandes (R-Pinellas County) in
crafting simple and permissive language to
create and nurture a flexible and transparent
private flood insurance regulatory framework in
every state in the country. The result is a draft
flood insurance narrative that was presented at
the NCOIL meeting as a proposed Part V to
NCOIL’s national model flood disaster relief bill.
It’s based on Florida’s private flood insurance
law, first enacted in 2015.
Florida’s flood insurance laws are simple and
flexible, with the goal to provide consumer
choices and alternatives to the debt-ridden,
outdated, and increasingly expensive NFIP.

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The draft narrative language provides the

• Form approval if the regulator currently
requires such to ensure policies meet or
exceed available NFIP coverage

• The ability for insurance companies to
test rates in the market without prior

•Notice of intent from insurance
companies to regulators to enter the

•Consumer education by insurance
agents about flood peril and the
coverages available

•Regulator certification that the policies
are adequate to meet banking regulation
mandates in mortgages.

Most of the provisions in the draft narrative
have the word “may,” so the provisions are
permissive. It is written in a manner that is not
technical, and can serve as the framework for
states wishing to reduce their reliance on
federal flood insurance.
As a regulatory consultant to investors who are
entering Florida’s insurance market, I know our
insurance commissioner’s office gets calls
regularly from interested parties that want to
write flood insurance in Florida to help our
citizens protect against flood – the goal here is
to help that success occur in other states.
It is also our goal to educate other states’
legislators about the concepts in this language
that have been tried and tested in Florida,
working with all trade groups and industry
stakeholders who came around the table to
make it successful. Many in the industry were
concerned that this language, while primarily
permissive throughout with the use of “may”
instead of “shall,” was overreaching and many
believe still, that states do not need this at all
to promote a private flood insurance market.
What isn’t in dispute is the significant premium
savings overall that the private insurance
market is bringing to consumers. In Miami-Dade
County, ground zero for Hurricane Andrew in
1992, one private insurer’s average premium is
$677 compared to the NFIP’s $980 average. In
Broward County, the average premium
comparison is $250 vs. $503. You can see a
full 67 county comparison here.
In the coming months, this draft model
language will be further refined and hopefully
voted on in its entirety at NCOIL’s December
meeting in Oklahoma. We will continue to work
with those who follow NCOIL activity to
educate them on the necessity of basic ground
rules for a regulatory framework that promotes
a private flood insurance market and to start
the conversation, state by state, about it.
Using a bill such as this is a simple way to
signal progress and remove doubt as to how a
private flood insurance market can start and
thrive. It is designed to provide suggestions to
regulators and those regulated on how to work
together to launch a market.
While Congress is likely going to continue to
kick the can down the road on full
reauthorization of the NFIP, it’s important to
have this model private flood insurance
legislation to let Washington know that “we got

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