New NFIP Bill Poses Threat to Agent Commissions
A bipartisan group of senators from coastal states, led by Sen. Bob Menendez (D-NJ) has introduced the National Flood Insurance Program Reauthorization and Reform Act of 2019 (S. 2187). The legislation is an alternative to a package passed unanimously last month by the House Financial Services Committee.
PIA National issued a statement pointing out the many positive aspects of the Senate bill, but also criticizing a provision as unacceptable: a reduction in the Write-Your-Own (WYO) reimbursement rate from 29.9 to 22.46 percent, a 25 percent cut from its current level. As a result, most, if not all, WYO insurance carriers could be pushed out of the program. Those who remain would likely be forced to cut agent commissions to account for the reduction in the WYO rate.
A bipartisan path to NFIP reauthorization already exists in the form of the House legislation that passed out of the Financial Services Committee unanimously last month. The House Financial Services package includes essential reforms to the program while leaving the WYO rate at its current level. PIA National fully supports the reauthorization of the NFIP and encourages passage by the full House and the Senate of the House Financial Services Committee package.