Policy Issuance 5-95
October 4, 1995
Subject: Rebating of Agent's Commissions
Background: The Mitigation Division has received inquiries from producers and Write Your Own Companies concerning the rebating of agents' commissions with respect to the National Flood Insurance Program (NFIP). The three committees that advise the Mitigation Division regarding the NFIP have provided input on this issue: the Flood Insurance Producers National Committee, the Insurance Institute for Property Loss Reduction Flood Insurance Committee and the Write Your Own Marketing Committee. The Insurance Institute for Property Loss Reduction Flood Insurance Committee did not comment as a committee because of concerns about potential anti-trust issues. However, two member companies of that committee responded as individual companies.
The comments pointed out the need for the NFIP, as a Federal program operating on a national scale, to have a uniform pricing system countrywide, so that insureds would always pay the same price for the same risk, regardless of geographic location. This is the only insurance program for the general public that is nationally available with Federal programmatic oversight.
After reviewing all the comments received, the Mitigation Division has concluded that the purposes of the NFIP are better served by maintaining the uniform pricing system countrywide.
Policy Statement: In order to preserve the uniform pricing system of this national program, producers writing policies directly with the Federal Government as well as with Write Your Own Companies shall not engage in rebating agents' commissions on NFIP policies.
Last Modified: Wednesday, 24-May-2006 11:49:22 EDT