NFIP Refund Procedures Announced
The Federal Emergency Management Agency (FEMA) and the National Flood Insurance Program (NFIP) have issued their first set of instructions regarding premium refunds, which the NFIP will begin implementing on October 1, 2014. These refunds are mandated under the Homeowner Flood Insurance Affordability Act of 2014 (HFIAA-2014), which reverse certain provisions of the Biggert-Waters Flood Insurance Reform Act (BW-12). These instructions are contained in NFIP Bulletin w-14035.
Last week, PIA National issued a Special Edition of PIA National Newsline devoted to this and all of the changes to the flood insurance program that have been issued to date. Specific to the issue of the upcoming refunds, it is important to note that they will not be huge and they do not apply to everyone.
FEMA and NFIP are—sporadically—issuing changes and advisories to how the flood insurance program will operate and are designed to reconcile the provisions of HFIAA with BW-12. As you may have noticed, these changes are not happening all at once. They are being rolled out in “dribs and drabs,” as they are being developed. It should also be noted that many of the new changes that come out can supplant or supersede previous bulletins and issued procedures. All of this poses a big challenge to agents and their Write Your Own (WYO) carriers.
UPDATE: NFIP’s refund information from last week (NFIP Bulletin w-14035) was issued before WYOs and the Flood Insurance Producers National Committee (FIPNC) had a chance to review it. At the close of business on Friday July 3, FEMA/NFIP was advised that modifications and clarifications are needed to this latest bulletin. Please see the attached w-14037, the first of such clarifications to be issued. This does NOT replace, but is to be read in league with, NFIP Bulletin w-14035.
This is another example of why PIA strongly encourages you to closely follow our weekly and special edition updates on NFIP.