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House GOP to Unveil 5-year Flood Insurance Bill

House Republicans are preparing to release draft legislation that would extend the National Flood Insurance Program for five years past its scheduled Sept. 30, 2017 expiration...
May 17, 2017

House Republicans are preparing to release draft legislation that would extend the National Flood Insurance Program (NFIP) for five years past its scheduled Sept. 30, 2017 expiration. The GOP plan is meant to make federal flood insurance less expensive and private flood insurance more accessible. A discussion draft outlining possible provisions is circulating on Capitol Hill.

PIA supports long-term reauthorization of the NFIP, together with common-sense reforms to the program, including ways to encourage the development of private-market alternatives. However, PIA cautions lawmakers against doing anything that would lead to a cut in agent compensation.

PIA: Don’t Cut Commissions

It is very likely that the House bill will lower the Write-Your-Own (WYO) reimbursement percentage of 30.9 percent, which is used by carriers to pay administrative expenses as well as agent commissions, among other things. PIA National opposes any effort to lower the 30.9 percent cap.

“One of the few areas of bipartisan consensus when it comes to National Flood Insurance Program (NFIP) reauthorization is that more homeowners, not fewer, need to have flood insurance,” said Jon Gentile, vice president of government relations of PIA National. “Any proposal to reauthorize the NFIP that would impede agents’ active engagement in selling flood insurance should be rejected.”

Gentile said cutting the reimbursement rate for Write-Your-Own (WYO) carriers would be counter-productive and lead to fewer policies being sold.

“A cut to the reimbursement rate for Write Your Own insurance companies would likely trickle down to independent agents who sell this very complicated and vital line of insurance,” Gentile said. “That cut would lead to an exodus of qualified agents selling it.”

“Any proposal to reauthorize the NFIP that would impede agents’ active engagement in selling flood insurance should be rejected,” Gentile told Best’s News Service. “We are aware the program is heavily in debt due to hurricane Katrina and Superstorm Sandy. However, fewer qualified agents selling the products will hurt consumer access and slow the NFIP’s take-up rate when the very opposite is needed to ensure the continued viability of the program.”

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