Sec. 9. Alternative approach for assessing and pricing flood risk
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It is the sense of the House of Representatives that— there should be established in the House of Representatives a Bipartisan Task Force on Innovation in Financing Flood Risk with the primary purpose of compiling data and information on innovative market-based solutions to make flood insurance more accessible and affordable for all Americans; and such Task Force should— consult with flood risk management stakeholder groups, insurers, reinsurers, State regulators, and financial experts knowledgeable and interested in finding innovative new rate methodologies and approaches to financing flood risk, including insurance risk securitization; compile information on existing risk assessment methodologies that— identify and standardize broader types of risks, hazards, structures, and losses, at a granular level, faced by property owners and communities, that helps investors, buyers, regulators, and policymakers finding a methodology to facilitate transparency and liquidity while reducing risk and increasing asset value through the clear reduction of risk uncertainty; encourage transparency in the development of Flood Insurance Rate Maps that the Federal Emergency Management Agency uses to assign risk in flood-risk zones; introduce financial or non-financial risk determination, analysis, and valuation of individual mortgages and housing transactions in a unified approach that includes engineering structures and environmental risks in the pricing by risk elements of catastrophe-linked products; integrate different approaches (financial, actuarial, and engineering) into one pricing framework that complements modern flood risk analysis and captures potential losses as accurately as possible; granulate the risks and value and offer risk-differentiated and risk-specific solutions so that any differentiated risk can be redistributed and diversified in numerous ways; explore transparency indexes that link monetary value to risk disclosure; and average national catastrophic insured losses and appropriately assign weights and risk values to equitably distribute catastrophic, all-peril insurance risk; consider the relationship between new transparent, benchmark pricing of flood insurance-linked securitization and structured catastrophe derivatives that integrates engineering, financial, and actuarial parameters to reduce the cost of mitigating financial losses due to floods; evaluate options for— educating policyholders on methods for risk mitigation; integrating policyholder and capital market participants, including investors, in the entire risk-financing process to demonstrate or feature specific system measures that increase asset value; and expressing different ways to incentivize both the financial markets and the individual market participant to update all risk disclosures and risk-remediating actions on an individual basis; and not later than 180 days after the date of the enactment of this Act, report findings, options, and recommendations to the House of Representatives with regard to the consideration of future flood-risk analysis and risk innovation in pricing.