Despite Christmastime Confusion, the NFIP is Up and Running

Here at PIA National, we work with Congress and the Federal Emergency Management Agency (FEMA) to help keep the National Flood Insurance Program (NFIP) up and running, particularly at times when the program undergoes its periodic reauthorizations by Congress. The last couple of weeks were particularly busy on that front, as the NFIP was scheduled to expire on Dec. 21, 2018. Just hours before the partial federal government shutdown began, the NFIP was extended until May 31, 2019, avoiding a lapse.  

Then, on December 26, five days after the president signed the NFIP reauthorization into law, FEMA notified stakeholders that, despite Congress and the president’s action, the NFIP would not be permitted to operate normally. As a result, agents and insurance carriers that administered NFIP policies were advised that they were prohibited from selling NFIP policies during the shutdown.

PIA National, along with other members of industry, were alarmed by this unexpected announcement, and we sprang into action, urging congressional leaders and contacts in the administration to reach an immediate resolution to this untenable situation. Fortunately, on December 28, FEMA issued a new statement instructing NFIP stakeholders that they were rescinding the prohibition on the sale, renewal, and endorsement of flood insurance policies. FEMA effectively was rescinding its own guidance from two days earlier on how industry stakeholders were to treat NFIP policies during the shutdown.

The prohibition guidance from FEMA contradicted the intent of the 115th Congress, which had passed a five-month extension of the program in less than a day, when the House and Senate could agree on little else.

In reinstating the program, David I. Maurstad, Deputy Associate Administrator for Insurance and Mitigation with FEMA, stated, “On December 26, 2018, FEMA informed you that due to a lapse in annual appropriation the NFIP may not sell new insurance policies, renew existing policies, or make monetary endorsements on existing policies. Effective immediately, this guidance is rescinded and NFIP Insurers may resume the sale, renewal, and monetary endorsements for flood insurance policies. Please treat the program as operational since December 21, 2018 without interruption. We appreciate your support, understanding, and patience these past few days.”

PIA National was gratified to see this turnaround, but the unnecessary confusion created by two days of chaos just reinforces the need for a long-term reauthorization of the program. Independent agents— and consumers—deserve better than the endless uncertainty of short-term fixes, and PIA National will be working with the 116th Congress to make sure agents are protected in any long-term NFIP reauthorization.

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