Banking and Finance Law Daily Wrap Up, FLOOD INSURANCE AND DISASTER RELIEF—Warren expresses concern over private flood insurance, (Feb 19, 2026)

By Carrie DeLeon

The senator targeted private flood insurance provider Neptune Flood’s overall business model and its reliance on artificial intelligence to assess risk and price policies.

Senator Elizabeth Warren (D-Mass.), ranking member of the Senate Banking Committee has sent a letter to Neptune Flood, questioning the provider’s business practices, and directing the company to respond to questions about its AI underwriting platform, rates, disclosures, and business model. “I write with concerns and questions about your overall business model and your reliance on artificial intelligence to assess risk and price policies, especially given the potential that your proposed approach would raise costs and otherwise harm communities across the country,” Warren wrote in the February 17 letter.

Warren explains in the letter that when the National Flood Insurance Program (NFIP) recently lapsed, Neptune Flood promoted its policies and asserted that private companies should eventually displace NFIP in the flood insurance market. Neptune even “made pitches at meetings in the fall at the White House and the Treasury Department,” and proposed that the NFIP stop issuing new policies.”

As a managing general agent that sells policies on behalf of the insurance companies, Neptune does not issue its own policies or handle any claims. It’s business model therefore on the longevity of its relationships with traditional insurers, “a risk that the company itself has identified,” Warren said. This also raises questions about whether Neptune’s customers are aware of which entity ultimately holds their policy and is responsible for paying claims in the event of a flood, Warren pointed out.

Warren is also questioning how Neptune uses underwriting models powered by artificial intelligence to facilitate the purchase of private flood insurance. “Neptune’s reliance on its in-house AI underwriting platform, Triton, enables the company to completely forgo any human underwriters … This raises serious concerns as to whether Neptune can explain its own inputs into Triton, how premiums are calculated, and whether or not customers can challenge or even understand the premiums they are paying,” Warren wrote.

Given the way Neptune “appears to be echoing Project 2025’s call for an end to NFIP,” Warren said it is important for Congress to “understand the company’s role in the market and examine its claims to provide affordable and reliable insurance.” Warren is therefore directing the company to respond to a list of questions by March 3. Warren’s inquiry relates to how policies are priced by Neptune to account for Neptune’s commission rates, if Neptune’s commissions are passed off to policyholders, how Neptune ensures its AI underwriting platform is compliant with state and federal law combatting discrimination, and what happens if a traditional insurer terminates its contract with Neptune.

“It is critical that consumers have access to affordable flood insurance and can rely on insurers holding up their end of the deal when disaster strikes … NFIP, while in need of reform, has been the primary provider of flood insurance and played an essential role in addressing systemic risk over the past 50 years as the private industry was unable to take on flood peril,” Warren concluded.

LegislativeActivity: AINews FinancialStability FinTech FloodInsurance OversightInvestigations