Filed Under:Agent Broker, Commercial Business

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.

Top Story

The 10 safest states for drivers

Not all roads are created equal. Do you live in one of the safest states in the country for drivers?

Top Story

10 websites (besides Google) that insurance investigators can use to research claims

Here are 10 sites that can provide a treasure-trove of information at your fingertips.

More Resources

Comments

eNewsletter Sign Up

Agent & Broker Insider eNewsletter

Proven success tips and essential information to help agents and brokers grow their practice – FREE. Sign Up Now!

Mobile Phone
         
Close

Advertisement. Closing in 15 seconds.