Industry News

On June 17, the U.S. Senate Committee on Banking, Housing and Urban Affairs held a second hearing on the reauthorization of the National Flood Insurance Program (NFIP). The first hearing was held in May.

The hearing featured the testimony of David I. Maurstad, the Deputy Associate Administrator of the Federal Insurance and Mitigation Administration (FIMA), which houses the NFIP within the Federal Emergency Management Agency (FEMA). Maurstad oversees the NFIP and the implementation of its new premium rating methodology, known as Risk Rating 2.0 (RR 2.0). The hearing mostly focused on the changes associated with RR 2.0, its rollout, and its anticipated effect on policyholders.

PIA shares FEMA’s stated goal of providing policyholders with the best available risk-based price for their policies, and we are working with FEMA to ensure as smooth a rollout of RR 2.0 as possible. At the same time, we want to ensure FEMA implements the new rating system in a way that is workable for both agents and consumers.

READ: Risk Rating 2.0 Dominates NFIP Hearing

A few senators questioned the role of, and compensation provided to, insurance carriers called Write-Your-Owns (WYOs), which administer the NFIP. PIA strongly opposes any proposal that would reduce the role of WYOs in the program and maintains our longstanding opposition to a reduction in the WYO reimbursement rate, which is the vehicle by which independent insurance agents are compensated for selling NFIP policies.