The National Association of Professional Insurance Agents (PIA) has wrapped up two weeks of visits to Capitol Hill pressing for reauthorization of the federal flood insurance program.
On April 8, PIA met with staff of the Senate Banking Committee
Subcommittee on Economic Policy to give input on provisions of S. 2238, a bill to reform and reauthorize the National Flood Insurance Program (NFIP) sponsored by Sen. Jim Bunning (R-Kentucky). PIA has also submitted testimony and met with members of Congress.
PIA reportedly supports common sense reforms to the NFIP as part of reauthorization and has actively lobbied for the inclusion of multiyear reauthorization in proposed reform legislation.
“PIA embraces S. 2238’s provisions designed to reduce and mitigate
repetitive losses,” said PIA Assistant Vice President of Federal Affairs Peter Bizzozero. “Additionally, we applaud the Senate Banking Committee for including a full, five year program reauthorization in the bill. PIA members, and their clients who turn to them for flood insurance through NFIP, need to know that authority for the program is seamless and ongoing.”
Bizzozero added that among the issues raised by PIA is a provision in S. 2238 requiring the Director of FEMA to issue minimum training and education standards for all insurance agents who sell NFIP-backed flood insurance policies in cooperation with the insurance industry and other interested parties. In February, PIA asked FEMA to work with Flood Insurance Producers National Committee (FIPNC) to redesign the current introductory course offered by FEMA to focus more on policy content, practices and what is not covered under the federal program.
“PIA currently conducts flood insurance education programs across the country, and has done so since the NFIP was created by Congress in 1968, both with Write Your Own (WYO) carriers and directly,” said Rita Hollada, head of PIA National’s flood insurance task force and current chairman of FIPNC. “We need a specific statement that the legislation does not intend to subject insurance agents to two sets of separate, competing or conflicting education
requirements – one from FEMA and another from the states – or have FEMA impose flood education upon and through all states, or have FEMA offer educational programming and content that FEMA does not follow itself in consistent practice and interpretation for the NFIP.”
The current federal authorization for the NFIP is set to expire on June
30, 2004. Congress passed this latest program extension to allow the Senate to have more time to debate S. 2238, a companion bill to H.R. 253, the Flood Insurance Reform Act of 2003, which was passed last year. Securing a multi- year reauthorization of the National Flood Insurance Program (NFIP) before it expires is one of PIA’s top legislative priorities this year.
Sen. Bunning spoke to PIA members on March 25, at the start of their day of visits with lawmakers on Capitol Hill. He discussed prospects for S. 2238 and the need for reform and the certainty of multi-year reauthorization.
“The bill will bring reform to the system and help us get the repetitive
loss properties taken care of,” Bunning said. “We will make it much easier for property owners to get mitigation assistance. When we reauthorize this bill it will be for five years. We won’t have to worry about the program expiring as you have for the last three years. Hopefully that will bring continuity and stability.”
The principal goal of reform of the NFIP as proposed in both S. 2238 and H.R. 253 is to reduce losses to properties for which repetitive flood
insurance claims payments have been made. The National Flood Insurance Program provides more than 90 percent of the flood insurance in the United States.
PIA is also requesting that all notification processes that may be
developed by FEMA be in conjunction with agents and WYO carriers who must execute these for FEMA, and that they include content that FEMA remains consistent with in its current practices, meanings, laws and processes of the federal flood program, and directions to agents and WYOs.
Further, any notification and communication requirements must not add extraordinary costs onto the price of the flood insurance policy, as well as not conflict with existing state requirements or trigger further state requirements related to property insurance generally, flood insurance specifically.
On balance, PIA reportedly believes that the ongoing discussions among all of the stakeholders involved in this latest round of Congressional and state activities respond to requests by PIA members for a much higher degree of clarity and timeliness regarding the flood insurance program, so that policy language, meanings, practices and expectations are clearer to all and that conflicts involving differing processes and practices between the federally-
administered NFIP and private sector property insurance be eliminated or resolved.
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