Private Flood Insurance and the National Flood Insurance Program (NFIP) [Updated November 26, 2019] [open pdf - 602KB]
From the Document: "The NFIP [National Flood Insurance Program] was first authorized by the National Flood Insurance Act of 1968 (42 U.S.C. §4001 et seq.) and was reauthorized until the end of FY2017 by the Biggert-Waters Flood Insurance Reform Act of 2012 (BW-12; Title II of P.L. 112-141). [...] In statute, Congress has found that (1) many factors have made it uneconomic for the private insurance industry alone to make flood insurance available to those in need of such protection on reasonable terms and conditions; but (2) a program of flood insurance with large-scale participation of the Federal Government and carried out to the maximum extent practicable by the private insurance industry is feasible and can be initiated. (42 U.S.C. §4001(b)). By law or regulation, federal agencies, federally regulated lending institutions, and government-sponsored enterprises (GSEs) must require certain property owners to purchase flood insurance as a condition of any mortgage that these entities make, guarantee, or purchase. [...] In BW-12, Congress explicitly provided for private flood insurance to fulfill this mortgage requirement instead of the SFIP [Standard Flood Insurance Policy], 'if' the private flood insurance met the conditions defined further in statute at 42 U.S.C. §4012a(b)(7)."
CRS Insight, IN10450
Congressional Research Service: https://crsreports.congress.gov/