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New WYO Bulletin Tightens Flood Anti-Rebating

During last week’s NFIP meetings, it was announced that the instructions relating to FEMA/NFIP’s anti-rebating policy, affirmed in April 2012 (w-12026) definitively applies in all cases
August 1, 2012

During last week’s NFIP meetings, it was announced that the instructions relating to FEMA/NFIP’s anti-rebating policy, affirmed in April 2012 (w-12026) definitively applies in all cases. This was reaffirmed several days after last week’s meeting with the issuance of a new bulletin (w-12046).

In April 2012, FEMA/NFIP issued a clarification bulletin, making clear all practices were to be fully compliant with the anti-rebating position, and any policies granted exceptions or that were subject to exceptions would need to be fully compliant beginning with renewals of said policies as of October 1, 2012. Unfortunately, some whose policies are currently enjoying rebate treatments are trying to extend beyond the October 1, 2012 renewal deadline by prepaying 2012-2013 NFIP insurance policy premiums before the October 1, 2012 deadline, or by canceling and reissuing to carry the expiration date of the re-issued NFIP policy further into late 2012 or early 2013.

So, FEMA/NFIP has just issued w-12046 making clear, no rebating after October 1. Any current policies must drop this modification provision beginning with October 1, 2012 renewals and forward.

What It Means to Agents: Simple message – no rebate, no inducement, no special rate, class or results treatment of NFIP costs by insureds, producers or WYOs that is not a published part of the NFIP rate, classification and pricing treatments as of the July 1, 2012 effective date of the NFIP reauthorization and reform federal law.

Read FEMA's clarification on rebating: WYO Bulletin w-12046 (FEMA/NFIP 7/25/12)

Read FEMA's statement on rebating: WYO Bulletin w-12026 (FEMA/NFIP 4/4/12)