The House Rules Committee held a hearing on the 21st Century Flood Reform Act late Monday. That committee is legislation’s last stop before going to the House Floor – which means that the bill could get a vote within days.
Celebrate excellence in insurance. Join us at the Insurance Business Awards in Chicago.
However, the National Association of Professional Insurance Agents (PIA) has come out against the bill. PIA says the legislation, if passed into law, will force insurance agents to stop participating in the NFIP. At issue is a proposed three-percentage-point cut of the Write Your Own (WYO) reimbursement rate paid to those participating in the NFIP.
“This cut was negotiated by trade groups and other representatives of insurance carriers without regard for the needs of consumers and agents, or the negative impact it will have on the flood insurance program and disaster preparedness,” said Jon Gentile, PIA’s vice president of government relations.
Learn more about flood insurance at the Future of Flood event being held in Miami, Florida on November 16. Click here for more details and to register.
Gentile said the cut would place an onerous burden on independent agents.
“Let us be clear: As carriers have stated, this reduction to the WYO reimbursement rate will be passed on to independent insurance agents through abrupt cuts to their commissions,” Gentile said. “Such cuts will force agents who currently sell flood insurance to leave the program, because it will become prohibitively expensive for agents to sell flood insurance, and it will discourage agents from entering the NFIP policy market. This will ultimately hurt consumers, just as cutting the agent out of the Affordable Care Act hurt consumers in their purchase of health insurance.”
Gentile said that back-to-back disasters this year illustrated the need for a healthy flood insurance program.
“In the aftermath of the devastation wrought by hurricanes Harvey, Irma and Maria, it is unconscionable that policymakers would include a provision making it less likely that homeowners will purchase flood insurance by undermining the NFIP’s sales force,” Gentile said. “It is unfortunate that consumers and agents are the only ones being asked to suffer the financial consequences of these programmatic changes, when they are arguably the groups that can least afford it.”
“It’s difficult to say… how the losses are going to end up being paid."
Want more private flood insurers? Increase federal rates
You've reached your limit - Register for free now for unlimited access
To read the full story, and get unlimited access to Insurance Business website content, just register for free now. GET STARTED HERE
Already a website member? Log in below.