Flood Insurance Bill Wording Worries Agents
By Mark E. Ruquet
NU Online News Service, April 19, 11:05 a.m. EDT?New language in a bill to reauthorize the National Flood Insurance program has drawn the concern of agents groups over what they say is imprecise language requiring certification of those selling the coverage.[@@]
Representatives from the National Association of Professional Insurance Agents and the Independent Insurance Agents & Brokers of America, both based in Alexandria, Va., said the Senate version of the reauthorization contains wording mandating the Federal Emergency Management Agency to require that agents be certified for the sale of flood insurance.
A bill, which has already passed the House of Representatives (H.R. 253), does not contain this. The Senate version (S. 2238) in other respects is similar to the House measure, extending the program for five years and reducing losses on properties with repetitive flood insurance claims, agent representatives said.
The certification language was inserted by Sen. Paul S. Sarbanes, D-Md., and Sen. Jim Bunning, R-Ky., who were responding to complaints from their constituents.
Rita Hollada, head of the PIA National's flood insurance task force and current chairwoman of the Flood Insurance Producers National Committee, said the complaints were widely voiced by residents in Maryland after Hurricane Isabel. They learned there were limits on the coverage that they were not aware of until after flooding from the storm.
Some constituents said agents did not provide the coverage limits information, according to Justin Roth, vice president of Federal Affairs for IIABA.
Mr. Roth and Ms. Hollada said that what concerns them is that as the bill currently stands, the agent certification language is vague.
Ms. Hollada, who is also vice president of Insurance Professional Inc., an agency in Selbyville, Del., said that the agents want to avoid a bill that infringes on the traditional role of states as the regulators of insurance and provider of insurance education by creating a federal licensing program.
"A national license smacks in the face of state licensing," she said.
"We are happy with the idea that there should be consumer protections, but the details are vague," said Mr. Roth. "We don't want to see a program that becomes so cumbersome that it leads agents not to go into it or puts too much of a burden on them."
The legislation has been approved by the Senate Banking Committee and is due for a vote on the Senate floor. Mr. Roth said it would then go to a conference committee where the language would be ironed out.
The current authorization is set to expire on June 30 of this year.
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