Filed Under:Markets, Commercial Lines

FEMA Bans Insurance Rebating on NFIP Policies

Insurance agents selling flood-insurance policies will no longer be allowed to cede a portion of their commissions to property owners to induce them to purchase insurance, a practice known as insurance rebating.

The Federal Emergency Management Agency announced the new policy, which will be effective Oct. 1, in a bulletin issued April 4.

 The bulletin says the Federal Insurance and Mitigation Administration (FIMA) had received inquiries from interested parties regarding the practice.

According to an association notice provided to National Association of Professional Insurance Agents members, FEMA acted at the request of the association and individual agents,

According to several industry officials, the problem developed in Florida, where there is no anti-rebating law.

“After careful consideration, FIMA has concluded that the goals of the NFIP are better served by a system of uniform national pricing that will ensure that policyholders pay the same price for the same risk,” the FEMA bulletin says.

It adds that FEMA does not directly regulate insurance agents who sell Standard Flood Insurance Policies, but that it does administer the National Flood Insurance Program and sets standards governing the activities of participating WYO Companies related to the sale and marketing of flood insurance.

Featured Video

Most Recent Videos

Video Library ››

Top Story

7 ways to prevent Halloween-related claims

Fire, distracted driving, vandalism and theft are some of the top risks on Halloween. Here are some safety tips for insureds from Travelers.

Top Story

10 insights into how small-business owners perceive cyber risk

Cyberattacks on small businesses are a real and growing problem, and the latest research by Nationwide shows owners are not prepared. Insurance agents can help.

More Resources


eNewsletter Sign Up

PropertyCasualty360 Daily eNews

Get P&C insurance news to stay ahead of the competition in one concise format - FREE. Sign Up Now!

Mobile Phone

Advertisement. Closing in 15 seconds.