PIA of Louisiana's 71st Annual Convention
July 19-22, 2014 • The Grand Hotel, Point Clear, AL
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Summary of Upcoming NFIP Program Changes April, 2015

The NFIP has announced April 1, 2015 program changes which include HFIAA Premium Surcharges and the first premium increases based on the new HFIAA premium caps. We provide you with a FEMA presentation of Changes to the National Flood Insurance Program — What to Expect as well as How April NFIP Changes will Affect Flood Policy Premiums fact sheet are linked here. See an excerpt below.

The changes will take effect on April 1, 2015.

"The changes taking place in April include an increase in the Reserve Fund Assessment, the implementation of an annual surcharge on all new and renewed policies, an additional deductible option, an increase in the Federal Policy Fee, and rate increases for most policies. Key changes include:
  • Implementing annual rate changes that set rates using rate-increase limitations set by HFIAA for individual premiums and rate classes:
    • Limiting increases for individual premiums to 18 percent of premium.
    • Limiting increases for average rate classes to 15 percent.
    • Mandatory increases for certain subsidized policyholders under Biggert-Waters and HFIAA.
  • Increasing the Reserve Fund assessments required by Biggert-Waters.
  • Implementing annual surcharges required by HFIAA
  • Guidance on substantially damaged and substantially improved structures, and additional rating guidance on buildings constructed before their communities' first Flood Insurance Rate Maps (FIRMs) became effective (known as pre-FIRM structures).
  • Implementing a new procedure for properties newly mapped into the Special Flood Hazard Area (SFHA) and existing Preferred Risk Policy Eligibility Extension (PRP EE), a cost-saving flood insurance coverage option for property owners whose buildings were newly mapped into an SFHA. The premiums will be the same as the PRP, which offers low-cost flood insurance to owners and tenants of eligible residential and non-residential buildings located in moderate- to low-risk areas for the first year (calculated before fees and assessments) to comply with provisions of HFIAA."

A New Plan to Collect Flood Insurance Premiums

Rules proposed by the Federal Reserve, the Office of the Comptroller of the Currency and other regulators would require flood insurance premiums paid by property owners to be automatically set aside in escrow accounts. This would ensure property owners in flood-prone areas stay current on their flood insurance bills. The escrow requirement would impact new and refinanced loans made after Jan. 1, 2016.

This requirement for lenders to escrow flood insurance premiums was included in both the Biggert-Waters Flood Insurance Reform Act of 2012 (BW-12) and the Flood Insurance Affordability Act of 2014 (GW14), congressional reform legislation for the National Flood Insurance Program (NFIP).

What It Means to Agents: Congress wanted to assure that as lenders require or offer borrowers to escrow for the property taxes and insurance premiums on mortgaged properties, that lenders' "insurance" portion of the escrow also provide for flood insurance premiums. NFIP mandates that lenders include a requirement for flood insurance if the mortgaged buildings are located in a High Hazard Flood Zone. However, this mandate does not preclude lenders from expanding this requirement of their borrowers, as their individual underwriting guidelines may dictate.

Upcoming PIA Events
10/31/2014 -- PIA of Louisiana Scholarship Forms Due

11/04/2014 -- CPIA-3 Sustain Success
(Opelousas, LA)

11/05/2014 -- New Orleans Chapter Meeting

11/06/2014 -- YIPs 4th Annual Glow Ball Tournament Sponsorship Opportunities

11/06/2014 -- YIPs 4th Annual Glow Ball Tournament

11/11/2014 -- CPIA-3 Sustain Success
(Kenner, LA)

11/12/2014 -- Baton Rouge Chapter Meeting

11/18/2014 -- Acadiana Chapter Meeting

12/02/2014 -- Northeast Chapter Christmas Party and Installation

12/02/2014 -- North Shore Chapter Christmas Party & Installation

Virtual Exhibit Hall

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Virtual Exhibit Hall

Hurricane Relief Center
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Hurricane Relief Center

Register Today for a FloodSmart Webinar

For the first time, FloodSmart, the marketing and education campaign of the National Flood Insurance Program (NFIP), is offering regularly scheduled webinars via www.Agents.FloodSmart.gov. Each webinar is designed to help you use the FloodSmart tools and resources to have the "flood talk" with current and prospective clients.

Register for the Basic FloodSmart Overview, which will be offered monthly. This webinar is designed to introduce you to FloodSmart's integrated marketing campaign, how the campaign drives consumer interest in flood insurance and how it can provide you with free leads. It also covers new tools and incentives. The first Basic FloodSmart Overview webinar is scheduled for Wednesday, November 12, from 1 to 2 p.m. EST. Space is limited, so register today:

PIA: Congress' Foot-dragging on TRIA
Couldn't Come at a Worse Time

One of things the insurance industry hates most is uncertainty, and with good reason: the ability to accurately assess and predict risk with reasonable certainty is key to success in the insurance business.

That's why Congress' foot-dragging in renewing the Terrorism Risk Insurance Act (TRIA) couldn't come at a worse time. TRIA is even more important now that the U.S. is currently at war with the Islamic State of Iraq and Syria (ISIS) and officials say ISIS poses a "severe threat" to the U.S. PIA's Ted Besesparis assesses the TRIA debate in an article in the National Underwriter.

Thanks to Our 2014 PIA Partners:

Americas Insurance Company

American Strategic Insurance (ASI)

Capital Premium Financing

Markel FirstComp

LCTA Workers' Comp

LUBA Workers' Comp

Prime Rate

Stonetrust Commercial Ins. Co.

VIP Software