States Implement NFIP Training Requirements
All too often after a damaging flood occurs, flood victims insist that their
insurance agent misinformed them about their flood risk or the availability
of flood insurance. Relatively few insurance agents receive training about
the hazard of flooding and the availability of flood coverage. Consequently,
many are ill-prepared to advise their customers about how to protect themselves
against flood losses.
Congressional Mandate
One of the provisions in Title II of the Bunning-Bereuter-Blumenauer Flood
Insurance Reform Act (FIRA), signed by the President in 2004, addresses
the need for NFIP training for insurance professionals. Section 207 charged
FEMA, in cooperation with the insurance industry and State insurance regulators,
with establishing minimum training and education requirements for all insurance
agents who sell flood insurance policies. Congress mandated that FEMA publish
these requirements in the Federal Register and inform insurance companies
and agents of the requirements.
Input received from various stakeholders emphasized the value of working
through State Insurance Departments to avoid establishing conflicting
or burdensome training requirements on agents. State Insurance Departments
have authority over agent licensing and continuing education (CE) requirements
for license renewal. Therefore, FEMA is encouraging States to make flood
insurance training a part of their licensing and CE requirements for agents.
Implementation
In September 2005, FEMA published a notice regarding training and education
requirements in the Federal Register, and subsequently communicated with
State Insurance Commissioners via several letters and webcasts/teleconferences.
In the months that followed, numerous State Insurance Departments have
responded by implementing various regulations that establish flood insurance
training requirements for insurance agents in their State.
As FEMA learns of
State actions related to flood insurance training requirements for agents, they are shared via
the FEMA website. For example, as of June 1, 2006, Delaware, Kentucky, Maryland, Massachusetts,
and Washington now require agents who sell flood insurance to complete
a flood insurance training course. CE credits are earned by agents who
complete this training.
North Carolina, Pennsylvania, and Texas each promote flood insurance
training and provide CE credits.
Support for States
FEMA supports States in implementing their flood insurance training programs
and will provide:
- Expertise for the development of a program that would give agents
a basic understanding of the NFIP.
- Access to NFIP training sessions and modules, including online.
- NFIP materials and other technical assistance needed to address
unique requirements.
As new NFIP policies and procedures or enhancements develop that should
be reflected in State-approved training, FEMA will provide these to State
Insurance Departments.
Incentives for Trained Agents
An insurance agent who understands how the NFIP works and can answer consumer
questions accurately, before the policy is purchased as well as when a loss
is sustained, is a valuable Program partner. FEMA offers incentives to encourage
agents to pursue the flood insurance training that will enable them to serve
in this role. The NFIP's Agent Co-Op Program provides agents, WYO companies,
and insurance associations with tools to produce local and regional advertising
that supports the national FloodSmart campaign. Agents who participate in
this program are reimbursed a portion of their advertising budget when they
use the program's pre-approved ad templates. An additional 25 percent in
Co-Op funds is offered to agents who have completed a State-approved flood
insurance training course within the past 12 months
(see www.FloodSmart.gov
for details).
Agents who enroll in the NFIP Agent Leads Referral Program receive free
leads generated through FloodSmart marketing efforts. In development is
a plan to give agents who have completed flood insurance training a special
designation or priority in the distribution of leads.
