PIA lobbies Congress on important federal issues

Members of PIACT and the Connecticut Young Insurance Professionals met with their respective congressional offices as part of PIA’s 2022 series of state-specific advocacy events that offer agents the chance to meet with federal policymakers on the issues that matter most to them. Throughout the year, PIA members from across the country will spend their 2022 Advocacy Days similarly engaging with lawmakers on one or more of PIA’s 2022 Issues of Focus.

This year, meetings were held with Rep. Jim Himes, D-4; and with representatives from the offices of Sen. Richard Blumenthal, D-Conn.; Sen. Christopher Murphy, D-Conn.; Rep. John Larson, D-1.

The PIA delegation included: PIACT President Bud O’Neil, CPIA: PIACT Vice President and CTYIP past President Nicholas Ruickoldt, CPIA; PIACT past President and PIA National Director Jon Black, LUTCF, CPIA; PIACT President-elect J. Kyle Dougherty, CIC; and PIACT Treasurer Kevin P. McKiernan, CIC, CPIA; and PIA Northeast Government Affairs Counsel Clare Irvine, Esq.

Long-term reauthorization of NFIP needed

PIA members noted the recent history of stalled efforts to reauthorize the National Flood Insurance Program on a long-term basis. On Sept. 30, 2017, with the NFIP about to expire and no agreement in Congress on a long-term reauthorization, Congress had to extend the program on a short-term basis to prevent a lapse. The NFIP is now on its 20th short-term extension since Sept. 30, 2017. Its most recent short-term extension means the program will expire again on Sept. 30, 2022. PIA has continuously worked with Congress to urge passage of stopgap measures to prevent a lapse in the program.

PIA members asked policymakers for a long-term reauthorization of the NFIP that includes important reforms, such as continuous coverage protection for policyholders who move their flood coverage from the NFIP to the private market and later seek to return to the NFIP; increased cost of compliance coverage for policyholders and flexibility for pre-flood mitigation; and the creation of a Federal Flood Insurance Advisory Committee with PIA representation. These reforms are among those included in PIA-supported legislation that passed the House Financial Services Committee in 2019 and the draft legislation released by the House majority in 2021. PIA believes this legislation is the basis as the way forward for a long-term NFIP reauthorization.

Preventing a cut in agent NFIP commissions

Perhaps most importantly, PIA members discussed the need to maintain the Write-Your-Own Reimbursement rate at its current level of 29.9%. The WYO reimbursement rate is the vehicle by which independent agents are compensated for selling NFIP policies. Carriers pay agent commissions out of their WYO reimbursement rate proceeds; any cut to the WYO reimbursement rate would force carriers to pass these cuts on to agents. Insurance agents play a crucial role in explaining this complex program and meeting their clients’ needs during the initial sales phase, throughout the renewal period, and, most meaningfully, in the aftermath of a flood loss.

Cutting independent agent commissions will lead this vital sales force to stop selling NFIP policies and will discourage future agents from starting. The combination will result in a decrease in the number of flood policies in force at a time when increasing the flood insurance take-up rate should be a universal priority. PIA will oppose any NFIP reauthorization effort that cuts the WYO reimbursement rate; we were pleased that there was no cut included in the recent 2019 bill that passed the House Financial Services Committee.

Risk Rating 2.0

PIA members gave on-the-ground reports of Risk Rating 2.0, which PIA supports, and its impact on consumers. RR 2.0 assigns premium rates to individual properties using substantially more granular data, aligning rates more closely to each property’s actual level of flood risk. RR 2.0 was implemented on all new policies and some existing policies this past Oct. 1, 2021. Remaining renewals began transitioning to RR 2.0 on April 1, 2022.

PIA supports affordability efforts for certain flood consumers to alleviate some of the effects of the increased rates. PIA believes RR 2.0 will in the long term ensure a fiscally healthier and improved NFIP program, but an affordability effort must be part of the solution.