Florida Agency to Fight FEMA Ban on Flood Insurance Commission Rebating
April 27th, 2012
The following article was published in The Insurance Journal on April 27, 2012:
Florida Agency to fight FEMA ban on Flood Insurance Commission Rebating
By Michael Adams
One Florida insurance agency is protesting a decision by the federal flood insurance program that would stop insurers and agents from offering clients a rebate on agents’ commission to customers who buy flood insurance policies.
Jerry Wahl, president of the Vero Beach-based insurance agency Statewide Condominium Insurance, announced his firm is looking to gather 100,000 signatures to protest the decision by the Federal Emergency Management Association. FEMA announced that as of Oct. 1, it will no longer authorize rebates of new and renewal policies underwritten by the National Flood Insurance Program.
Wahl said that FEMA’s decision not only violates Florida law but also would end a 1996 agreement between the state and FEMA allowing the rebates.
Wahl said Statewide was founded in 1996 as a niche insurance agency specializing in insurance programs for commercial condominiums and apartment complexes. “After much research, we discovered a Florida statute that has allowed us to return millions of dollars to our clients over the past 15 years and began selling flood insurance at a lower cost than any other agency in Florida,” he said.
Wahl is referring to flood policies written through private insurers participating in the “Write Your Own” program. These insurers market the policies through their own network of agents, administer claims, and then are reimbursed by the NFIP.
By basically vacating the 1996 agreement, the FEMA ban would increase costs to policyholders who are already laboring under a poor economy, according to Wahl.
He said Statewide currently offers a 15 percent rebate to all of its new and renewal customers who purchase an NFIP flood policy. He said this amounts to $2 million in rebate checks returned to condominium and apartment clients annually.
As a result of FEMA’s changes, Wahl said “clients would now be forced to pay up to 15 percent more for flood insurance in addition to Florida’s rising property premiums.”
Find this article here: http://www.insurancejournal.com/news/southeast/2012/04/27/245087.htm