Will NFIP reform trickle down to agent commissions?
The U.S. House of Representatives this week passed H.R. 2874, the 21st Century Flood Reform Act, introduced by Rep. Sean Duffy (R-Wisconsin). While the legislation includes a much-needed five-year reauthorization of the National Flood Insurance Program (NFIP), it also includes language that reduces the Write Your Own (WYO) reimbursement rate to administer the program. The proposed three-percentage-point cut of the WYO reimbursement rate undoubtedly will lead to a reduction in agent commissions as carriers seek to reduce costs.
H.R. 2874 now heads to the U.S. Senate where lawmakers will decide whether to take up the House version of the bill or come up with their own reauthorization and reform bill.
The NFIP is set to expire on Dec. 8, 2017. Congress and President Donald Trump in September agreed to a short-term extension of the program – which would have expired on Sept. 30 – as part of a larger deal which included a three-month agreement to fund the federal government, lift the debt ceiling, and provide federal aid to those areas affected by the recent hurricanes.