NFIP SPECIAL ALERT – Critical NFIP Bulletin Issued; Updated NFIP Manual Issued.
Friday, April 1, 2016
In two bulletins issued simultaneously, FEMA has released the long-delayed NFIP Manual for the April 1, 2016 changes and at the same time, it has issued a separate bulletin with critical information for PIA agencies that write flood.
The updated NFIP Manual for the April 1, 2016 changes has finally been issued by FEMA.NFIP Bulletin w-16020 will lead you to the FEMA Library where it can be found. NOTE: FEMA does not provide the Manual in one pdf file; rather, there are a series of files to be downloaded.
At the same time, FEMA has issued NFIP Bulletin w-16021—Clear Communication of Risk: When Congress passed the Homeowner Flood Insurance Affordability Act of 2014 (HFIAA), its Section 28 requires that FEMA advise every policyholder of what their flood risk is. This is referred to as the Clear Communication of Risk mandate.
After much discussion, FEMA decided it will outreach to insureds in two phases. This bulletin [w-16021] outlines what business will be placed in which phase, its timing, and includes all instructions and notices to insurers.
Important to Know:
1. This is a material change from how the NFIP has operated. Until GW14, NFIP has been a “once-&-done program”, i.e., write it correctly as it comes new into the NFIP, and then it just renews.
Originally, agents and WYOs were the parties charged with determining the flood zone and rating particulars. However, the law was changed to make the lender the party that determines flood zone (irrespective of what an agent or WYO may believe). The Flood Insurance Producers National Committee (FIPNC), the Insurance Institute for Business & Home Safety (IBHS) and Write-Your-Own carriers (WYOs) have made this and many other factors known to FEMA, as to why a policy may need to be corrected for reasons that are not under the control of agency or the WYO.
2. Hence, agencies must appreciate that while the name of this outreach is about communications, the underlying purpose is the review, update and if necessary re-underwriting of the NFIP book. Congress and FEMA want to be sure that every piece of business written in NFIP is written correctly.
3. Therefore, it is important that agencies review this entire bulletin. Members need to receive guidance from their WYO, as to the timing and for a copy of the final notice sent to policyholders.
4. Review your book of NFIP business. Suggested practice guidance advises that agencies may wish to identify what portions of their current NFIP book will be affected by the 1st and then 2nd phases. This will allow an agency to better prepare for and anticipate who and what nature of calls they may receive; how to handle these per advance consultation with your WYO; and also spot early any particularly complex/special treatment NFIP insureds you may have. For these “special” accounts, the agency may wish to organize the documentation in and for that file, and determine if, and if so when might the agency discuss this with their WYO to assure that everything and everyone are aligned.
What It Means to Agencies: As PIA agencies know, having the right carrier-partners is a crucial part of making it work well for agency insurance customers and agency. It is no different when writing NFIP business. Being with a quality, lead WYO-insurer that works everyday with Main Street Independent Agencies is important, and PIA National offers members resources in this area (see below).
If you have any questions, please contact Pat Borowski, firstname.lastname@example.org.
As always, THANKS for being a member of PIA!
PIA member-only flood programs:
Hartford Flood Program: If you find your agency in need of a new flood insurance program, please consider PIA’s program with The Hartford, now in its twelfth year. The program is available to PIA members and their policyholders in all 50 states.
For more information about the PIA/Hartford flood insurance program, please visit PIA National’s website at www.pianet.com/hartfordfloodinsurance or contact Joseph M. Surowiecki, Jr. of The Hartford at 860-547-5006 or email@example.com.
Floodbroker: Empower your clients to take the first step in making the flood insurance sale for you. Using FEMA’s digital flood insurance rate maps (DFIRMs) Floodbroker’s database has one function; providing National Flood Insurance Program (NFIP) information to PIA members’ clients and prospects to quickly and easily get a flood insurance quote. To learn more contact Evan Spindelman at 855.442.4130 or firstname.lastname@example.org or visit www.pianet.com/floodbroker.
Through PIA’s our partnership with The Hartford Flood Program our Flood Insurance Marketing Support Center (login required) provides materials to help you service your clients in a time of need.
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