Trade groups oppose National Flood Insurance Program proposalsReprints
Several insurance trade associations are jointly opposing a package of legislative proposals designed to reform the National Flood Insurance Program.
The House Financial Services Committee has scheduled the markup for these proposals for Wednesday.
However, several provisions would dramatically reduce private-sector participation in the program by adding new regulatory burdens for Write Your Own companies and agents while simultaneously imposing a below-market cap on their reimbursement rates for existing services provided, according to a letter sent Monday to key committee members.
The letter was jointly sent by the Indianapolis-based National Association of Mutual Insurance Companies, the Chicago-based Property Casualty Insurers Association of America, the Alexandria, Virginia-based Independent Insurance Agents & Brokers of America and the Washington-based American Insurance Association.
“Taken together, the draft legislation could make continued participation in the WYO program untenable for many insurance carriers, limiting options for consumers and ultimately raising costs for the government as more and more policies move to the NFIP-Direct program,” the insurers said in the letter.
Write Your Own insurers write about 86% of all NFIP policies, according to Federal Emergency Management Agency data.
“Due to these harmful impacts and the potential for marketplace instability, we oppose the legislative package in its current form as it will likely negatively impact consumers and not provide the reforms needed to encourage growth of a private flood market as an alternative.” the insurers said. “That noted, we hope to provide further policy recommendations for inclusion in a final bill that can accomplish our shared goal without imposing unnecessary and drastic costs on those who sell and service NFIP policies.”