With FEMA’s new pricing methodology for the National Flood Insurance Program (NFIP) to be implemented Oct. 1, use these new resources to prepare for the change.
As reported in the News & Views e-newsletter throughout the year, Risk Rating 2.0, FEMA's new pricing methodology for the National Flood Insurance Program (NFIP) is scheduled to be implemented on Oct. 1.
All new policies effective on or after Oct. 1 must be issued under Risk Rating 2.0. Existing policies renewing with effective dates between Oct. 1, 2021, and March 31, 2022, can renew under the legacy rating plan or renew their policy under Risk Rating 2.0. All existing policies with renewal dates on or after April 1, 2022, will be renewed under Risk Rating 2.0.
With implementation nearing, FEMA just released the Risk Rating 2.0 edition of the NFIP Flood Insurance Manual (FIM) effective Oct. 1. This edition of the FIM provides guidance for administering NFIP policies written under the new pricing methodology.
Additionally, FEMA created the “Roadmap to the Risk Rating 2.0 Flood Insurance Manual" to help navigate from the April 2021 legacy FIM to the October 2021 Risk Rating 2.0 FIM. The document provides a crosswalk of legacy FIM content alongside information about where to locate that content in the Risk Rating 2.0 FIM.
FEMA also released the Industry Transition Memorandum (ITM) effective Oct. 1 as an attachment to Write-Your-Own Bulletin w-21012 ITM. The ITM explains how the transition from the legacy rating plan to Risk Rating 2.0 will occur and provides business, data and information technology guidance for NFIP insurers and vendors on how to accomplish that transition.
In addition, FEMA has updated the NFIP Services page to provide access to the latest documents for Risk Rating 2.0.
The Big “I" believes that Risk Rating 2.0, if properly implemented, has the potential to improve the NFIP experience for agents and consumers, but emphasizes that the rollout of the program will be critical in determining the success of the effort.
As FEMA continues to provide more information regarding Risk Rating 2.0, the Big “I" will continue to provide members with updates in the weekly News & Views e-newsletter.
Wyatt Stewart is Big “I" assistant vice president of federal government affairs.