Why we oppose the current draft of NFIP reform legislation
With the National Flood Insurance Program’s (NFIP) Sept. 30 expiration date fast approaching, U.S. House Republicans are working to pass a flood insurance legislative reform and reauthorization package which could be addressed by the House Financial Services Committee as early as this week. IA&B, along with our federal government affairs team at the Big “I,” are opposing this legislative package based on the significant cuts proposed to the Write Your Own (WYO) program.
Provisions in the draft legislation would not only add new regulatory burdens to the WYO program, but would also cap compensation for WYOs at no more than 25 percent of policyholder premiums before any fees and surcharges are applied. As the current WYO program base compensation starts at 31.9 percent, a 25 percent cap undoubtedly will lead to a significant reduction in agent commissions as carriers seek to reduce costs.
The Big “I” has been working for months with lawmakers on both sides of the aisle to ensure that no direct cap on agent commissions is contained in any NFIP reform legislation, and they continue to lobby against the proposed cuts to WYO program compensation. The Big “I,” along with the three major property-casualty insurer trades who are also opposing the current package, delivered a joint letter to the Hill earlier this week.