PIA National Succeeds in Keeping Agent Commission Cut Out of Draft NFIP Legislation


The National Association of Professional Insurance Agents (PIA National) is optimistic about four draft bills that were recently released by House Financial Services Committee Chairwoman Maxine Waters (D-CA). Each of the released bills pertains to one of four categories: mitigation, mapping, administrative reform, and a foundational bill that reauthorizes the program for five years, forgives the debt, and addresses affordability. This draft package was released in preparation for a discussion on NFIP reauthorization to take place at this week’s House Financial Services Committee hearing, for which PIA National submitted testimony.

PIA National has advocated for several provisions in this package, including increased investment in mapping and mitigation, the creation of a consumer appeals process of mapping decisions made by FEMA, and the inclusion of provisions to continue the program’s move toward risk-based rates.

Most importantly, the draft package doesn’t include a cut to the Write-Your-Own (WYO) rate for insurers administering the NFIP. In 2017, the House passed an NFIP reauthorization bill that included such a cut. If a WYO rate cut had become law, it could have forced the WYOs to pass that reduction on to agents through their commissions. In turn, that reduction in agent commissions could have resulted in an exodus of qualified independent agents from the NFIP, which would have devastated the program. As a result, PIA National opposed both the amendment that included that cut and the 2017 bill overall, while noting our continued support of other key reform provisions and the need for a long-term reauthorization of the NFIP.

Since then, PIA National has continued meeting with congressional offices to request that this rate remain the same. While the release of Chairwoman Waters’ draft package is only an initial step toward reauthorizing the NFIP, PIA National views the maintenance of the current WYO rate as an early victory for our tenacious advocacy on this issue.

In addition, PIA National will continue to work with the Committee to ensure the bill that is eventually passed out of committee reflects the priorities of independent insurance agents and consumers. To that end, we will encourage Chairwoman Waters to include a continuous coverage provision, one of our priorities that was not in the newly-released package. With the recent FEMA guidance on private flood policies set to take effect July 1, 2019, and as the private flood market grows, consumers could be left vulnerable if their policies are canceled in the middle of the policy year. If that happens, they should be permitted to go back to the NFIP and purchase a policy at the rate they previously had. PIA National views the inclusion of a continuous coverage provision as essential to any final NFIP reauthorization bill.

PIA National looks forward to working with the committee members on this important issue.

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