Congress still hasn’t renewed the National Flood Insurance Program (NFIP). It expired on September 30th last year and since then has been temporarily extended five times. The program needs some permanent solutions and needs them quickly.
The Federal Emergency Management Agency (FEMA) runs the NFIP. It is close to $30 billion in debt and — since Congress won’t act — FEMA wants to start making changes to the program.
Here are some of the changes:
• FEMA has picked up $1.5 billion in reinsurance from a couple of dozen companies to help pay for future claims
• The non-compete rule has been rescinded
• That means insurers in the Write Your Own program can now sell their own flood insurance coverage
• Commissions will also be cut to Write Your Own insurer participants
Tom Santos of the American Insurance Association (AIA) likes the changes. “The flooding events in 2016 and 2017 clearly show that too few property owners purchase flood coverage. Thus, we ought to be looking for ways to expand consumer options by preserving and expanding the private sector’s ability to offer flood insurance coverage — both NFIP coverage and private coverage.”
Source link: Insurance Business America