Big ‘I’ Participates in NFIP Roundtable

Earlier this month, Rep. Emanuel Cleaver (D-Missouri), Ranking Member of the U.S. House of Representatives Insurance Subcommittee, invited stakeholders interested in the next reauthorization of the NFIP to attend a roundtable discussion in Kansas City, Missouri.

The Big “I” was the only group representing independent insurance agents invited to participate in the meeting. Matt Barton, vice president of government and industry affairs at the Missouri Association of Insurance Agents, represented the association.

The roundtable meeting touched on several NFIP issues, including participant concerns with the NFIP; areas that work well or warrant preservation; suggestions for reauthorization; concerns with the mapping or mapping appeals process; options for expanding the role of the private market; and how to preserve affordability.

In addition to industry stakeholders, John Huff, the director of insurance for Missouri, as well as Eric Nordman, director of the Regulatory Services Division and the Center for Insurance Policy & Research for the National Association of Insurance Commissioners, attended the roundtable.

All groups expressed support for H.R. 2901, the “Flood Insurance Market Parity and Modernization Act,” by Reps. Dennis Ross (R-Florida) and Patrick Murphy (D-Florida), as an example of how the private market can complement the NFIP. This bill would enable surplus lines insurance to meet the mandatory purchase requirement for flood insurance in the Special Flood Hazard Area. The legislation also ensures a policyholder will not lose their grandfathered status if they move from the NFIP to the private market, then decide to return to the NFIP if their private market policy no longer meets their needs. This bill passed the U.S. House of Representatives unanimously in April, and everyone at the roundtable thanked Rep. Cleaver for supporting the legislation.

During the meeting, the Big “I” discussed numerous challenges facing the NFIP, including the need to increase the take-up rate for all flood policies in order to grow the base of the program and diversify program risk. Some of the changes Biggert-Waters instituted to the NFIP—such as increased rates and policy surcharges—have led many preferred risk policyholders to drop their flood coverage. In order for the program to regain financial footing, the NFIP must grow its base.

Independent agents can play a vital role in that growth, but in order to do so, Congress must modernize the program. The Big “I” supports using updated mapping technologies to help policyholders better understand their risk. The association also believes Congress should consider ways to best use private reinsurance and the insurance-linked securities markets to reduce taxpayer exposure. Lastly, the Big “I” supports incentivizing mitigation practices for homeowners, businesses and communities.

The Big “I” was pleased to be a part of the flood discussion and will remain at the center of the next NFIP reauthorization as deliberations continue in Congress.

Jen McPhillips is Big “I” assistant vice president of federal government affairs.