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NFIP Back On Track After FEMA Relents

Quick action by a bipartisan group of lawmakers and business groups, including PIA, got FEMA to rescind guidance that briefly shut down new policies.
NFIP Back On Track After FEMA Relents
January 8, 2019

For two days after Christmas, it looked like the National Flood Insurance Program (NFIP) would get pulled into the federal government shutdown. But then quick action by a bipartisan group of lawmakers and business groups, including PIA, prompted a reversal by the Federal Emergency Management Agency (FEMA).

On December 26, five days after Congress extended, and the president signed into law, a six-month extension of the NFIP, FEMA notified stakeholders that, despite Congress’s action, the NFIP would not be permitted to operate normally. As a result, agents and insurance carriers that administered NFIP policies were advised that they were prohibited from selling NFIP policies during the shutdown.

PIA National, along with other members of industry, sprang into action, urging congressional leaders and contacts in the administration to reach an immediate resolution to this untenable situation. They were joined by key members of Congress, who maintained that FEMA had made a big mistake.

Then late Friday Dec. 28, FEMArescinded the guidance it had issued just two days earlier that insurers should no longer sell new policies backed by the flood insurance program during the government shutdown. Stakeholders had pointed out that FEMA’s action contradicted Congress’ passage of a six-month extension of the National Flood Insurance Program (NFIP) on the evening of Dec. 21, just hours before the government shutdown began.

READ: Yes, FEMA is still selling flood insurance policies

David I. Maurstad, Deputy Associate Administrator for Insurance and Mitigation with FEMA, issued a statement late Dec. 28, saying:

“On December 26, 2018, FEMA informed you that due to a lapse in annual appropriation the NFIP may not sell new insurance policies, renew existing policies, or make monetary endorsements on existing policies. Effective immediately, this guidance is rescinded and NFIP Insurers may resume the sale, renewal, and monetary endorsements for flood insurance policies. Please treat the program as operational since December 21, 2018 without interruption. We appreciate your support, understanding, and patience these past few days.”

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