The House Financial Services Committee is set to consider, or “mark up,” legislation that would reauthorize and reform the National Flood Insurance Program (NFIP) this week. PIA National is pleased to support legislation that would provide a five-year reauthorization of the NFIP, which is currently on its 12th short term extension since 2017.
Two relevant bills will be marked up this week. The first is H.R. 3167, the National Flood Insurance Reauthorization Act, bipartisan legislation sponsored by House Financial Services Committee Chairwoman Maxine Waters (D-CA) and Ranking Member Patrick McHenry (R-NC).
This bill includes many of the priorities PIA National has been advocating for, like continuous coverage protections necessary to policyholders who leave the NFIP to purchase a private flood policy and return to the program; critical investments in mitigation; and increased funds for mapping. At the same time, it maintains the grandfathering process and the gradual implementation of actuarially sound rates.
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What’s not in the bill is equally as important: a cut to the Write-Your-Own (WYO) reimbursement rate. The WYO reimbursement rate is how insurance agents get compensated for selling NFIP policies. NFIP reauthorization legislation that passed the House last Congress included a cut to the WYO reimbursement rate.
PIA National was the only insurance agent association to oppose the legislation because of this issue. While other insurance trade associations supported that bill despite the damage it would have done, PIA National developed a strategy of alerting members to the harm a cut to the WYO reimbursement rate would bring to independent agents and thus consumers. PIA National made opposition to a cut to the WYO reimbursement rate a top priority at successive fly-ins and as part of our year-round advocacy. We are grateful to Chairwoman Waters and her staff for their thoughtful response on this issue. The absence of a cut to the WYO reimbursement rate in this legislation shows what determined, unwavering advocacy can accomplish.
That said, this process isn’t over. PIA National will remain vigilant during the markup this week and throughout the rest of the NFIP process to oppose any attempt to add an amendment cutting the WYO reimbursement rate.
PIA National also supports the other NFIP bill that will be considered by the committee during the markup. The NFIP Administrative Reform Act is sponsored by Rep. Nydia Velazquez (D-NY). This bill provides for common sense reforms to the policyholder appeals procedure, improvements to aspects of the claims process, and the creation of a Federal Flood Insurance Advisory Committee with insurance agent representation. Perhaps most notable for PIA members is the section strengthening the disclosure requirements for standard flood insurance policies. This provision will make the options for and limitations of a standard flood insurance policy clearer to policyholders and will include a disclosure acknowledgment sheet that will protect consumers and independent agents selling NFIP policies.
PIA is urging the committee to pass both bills in a bipartisan fashion.
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