BIG “I” APPLAUDS HOUSE FOR REVIEWING FLOOD PROGRAM
House committee hearing follows similar review in Senate committee Tuesday
WASHINGTON, D.C., Oct. 20, 2005—The Independent Insurance Agents & Brokers of America (the Big “I”), the nation’s largest insurance association, has testified in support of Congressional efforts to examine and improve the National Flood Insurance Program (NFIP).
The House Financial Services Committee today held a hearing to review the program’s structure and its actuarial viability. The Senate Banking Committee held a similar hearing Tuesday.
“Our members are very pleased that both houses of Congress are taking a serious look at this crucial program for consumers,” says Charles E. Symington Jr., Big “I” senior vice president for government affairs and federal relations. “We have always been in favor of taking a careful look at this program and determining how to strengthen it and serve consumers better. We were strong supporters of the Flood Insurance Reform Act of 2004, and we look forward to working on legislation in the near future to make additional needed reforms to the program.”
One of the crucial questions surrounding this week’s hearings is whether the NFIP should be more proactive in mandating mitigation for property owners whose homes lie in active flood plains. The Big “I” testimony supported disclosure of flood risks to home buyers and strengthened NFIP building regulations.
“Anytime you have repetitive losses, it inevitably has an adverse impact on the program and on prices for consumers,” says Patrick O’Brien, Big “I” director of federal government affairs. “We hope to see real solutions to this problem, and we will work with members in both houses of Congress to develop legislation that addresses this issue effectively for the benefit of all consumers.”
The Big “I” testimony also advised the committee that a proposed Federal Emergency Management Agency (FEMA) rule designating property-and-casualty agents as “agents of insureds,” not agents of private write-your-own (WYO) insurers, would undermine agents’ and brokers’ abilities to establish contractual relationships and alter the rights and responsibilities provided for in such contracts.
“Restructuring the agent-company relationship, in effect, would shield private insurers from liability for their own errors, which would leave agents fully responsible for errors that may not be their fault,” O’Brien says. “This would increase the liability exposure of agents.”
IIABA is also reviewing all aspects of the NFIP, including coverage limits, contents coverage, mitigation provisions, living expenses, and more.
Founded in 1896, the Big “I” is the nation’s oldest and largest national association of independent insurance agents and brokers, representing a network of more than 300,000 agents, brokers and their employees nationally. Its members are businesses that offer customers a choice of policies from a variety of insurance companies. Independent agents and brokers offer all lines of insurance—property, casualty, life, and health—as well as employee benefit plans and retirement products. Web address: www.independentagent.com.
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