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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.
 Last updated on December 1, 2006