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Thursday, January 30, 2014

Senate Passes Flood Insurance and Producer Licensing Legislation

This afternoon the Senate passed S. 1926, the combined NARAB and flood insurance reform bill, by a bi-partisan vote of 67 to 32.

As we previously reported, there were four key amendments to the bill that would impact the bank-insurance industry:

ABIA-Supported:
  1. Hagan amendment: Passed. This amendment limits the duty to establish escrow accounts to first liens. It received overwhelming response and was therefore adopted and made part of the base text. 
  2. Heller/Lee amendment: Defeated. This amendment clarified that any private flood insurance policy accepted by a State shall satisfy the mandatory purchase requirement. It was narrowly defeated by a vote of 49 to 50.
ABIA-Opposed:
  1. Merkley amendment: Withdrawn prior to vote. This amendment would have prohibit mortgage servicers from receiving compensation for the force-placement of flood policies and prohibit the free sharing of tracking and administration information between an insurer and a servicer.
  2. Coburn amendment: Defeated. This amendment would have provided states an opportunity to opt-out of the National Association of Registered Agents and Brokers (NARAB) provisions. ABIA opposed this measure since having all the states included is the purpose of the bill.