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FEMA Bans Rebating on NFIP Policies

Beginning October 1, 2012, Write Your Own companies participating in the National Flood Insurance Program will be prohibited from authorizing the rebating of commissions on new or renewal NFIP policies
April 10, 2012

Beginning October 1, 2012, Write Your Own companies participating in the National Flood Insurance Program will be prohibited from authorizing the rebating of commissions on new or renewal NFIP policies.

PIA brought this issue to FEMA and the NFIP in 2011, and again during the most recent March 2012 meeting of the Flood Insurance Producers National Committee (FIPNC), when PIA National’s liaison to the NFIP and FIPNC Richie Clements directed federal officials to their current policy (making clear no changes can be made to NFIP pricing) and urged NFIP to stay the course.

In an April 4 memo announcing the new policy, Edward L. Connor, FEMA Deputy Associate Administrator for Federal Insurance noted, “Insurance rebating is confusing to consumers, and it has been the source of many complaints from agents and companies.” He added that after careful consideration, it was determined that “the goals of the NFIP are better served by a system of uniform national pricing that will ensure that policyholders pay the same price for the same risk.” Connor also noted that while FEMA does not directly regulate agents who sell flood policies, the agency administers the NFIP and sets standards for participating WYO companies.

PIA commends FEMA and NFIP for its strong action in support of transparency and fairness in the flood insurance program.

Any questions regarding this matter can be directed to Jhun de la Cruz, Underwriting Branch Chief, National Flood Insurance Program, Federal Insurance and Mitigation Administration, at jhun.de-la-cruz@dhs.gov. (However, PIA encourages you to share these comments with us as well at patbo@pianet.org, to better appreciate PIA members’ issues and better represent your positions.

Read the full NFIP Bulletin: WYO Program Bulletin W-12026 (Issued 4/4/12)

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