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Pallone & Pascrell Lead Opposition to Giveaway by GOP to Insurance Companies on Flood Insurance

December 21, 2018
Press Release

Washington, D.C. – Today, Congressman Frank Pallone, Jr. (NJ-06) and Congressman Bill Pascrell, Jr. (NJ-09) helped defeat a last minute GOP effort to add a controversial giveaway to insurance companies as part of an extension of the National Flood Insurance Program (NFIP) at the expense of policyholders and taxpayers. The Congressmen have been leaders in demanding transparency needed reforms for the program.

“We were proud to stand in a bipartisan manner to defeat the Hensarling bill,” said the Congressmen. “This legislation was a last minute attempt by Republicans to give an early Christmas gift to private insurance companies, including those who have taken advantage of our constituents and the National Flood Insurance Program. It is a mistake to allow private insurance companies who partner with and service NFIP policies to sell their own competing private policies. Repealing the non-compete clause allows private insurers to cherry-pick the best risk policies for their own businesses while forcing middle class taxpayers to pick up the rest. Strengthening flood insurance is too important to be part of Trump and Republicans’ games. We are gratified to pass a clean extension. In the impending Democratic House we will push for the bipartisan, bicameral Sustainable, Affordable, Fair, and Efficient (SAFE) National Flood Insurance Program Reauthorization Act.”

The letter the Congressmen sent in opposition to the GOP proposal is below.

Dear Colleague:

The Senate unanimously passed a Continuing Resolution to keep the government open that also extends a number of critical programs that needed to be reauthorized, including the National Flood Insurance Program (NFIP), until February 8, 2019.

In a last-ditch effort to attach harmful policy riders to NFIP reauthorization – an approach that has been rejected numerous times by both the House and the Senate this Congress – House Republicans are attempting to attach controversial policy reforms to a bill that would keep the NFIP’s doors open. While H.R. 7388 reauthorizes the NFIP through May 31, 2019, it includes a toxic harmful policy change that was recently implemented administratively by the Trump administration.

This policy reverses FEMA’s long-standing WYO “non-compete clause” and would allow the private insurance companies that partner with and service NFIP policies to sell their own competing private policies to unsuspecting consumers. Repealing the non-compete clause would essentially let the fox guard the henhouse by allowing private insurers to cherry-pick the best risk policies for their own private businesses while forcing taxpayers to pick up the rest.

The Senate has already unanimously passed a clean extension that does not include this toxic rider. The House should ensure that flood insurance remains available to millions of homeowners, businesses, and renters across the country by passing a clean extension. We urge a NO vote on this continued attempt to threaten our Federal programs with irresponsible riders.


Frank Pallone, Jr.

Bill Pascrell, Jr.

Nydia Velázquez