FEMA Flood Insurance Training Requirements for Insurance Producers Selling Through the National Flood Insurance Program and Recommendations Regarding the Sale of Flood Insurance

[LOGO] MITT ROMNEY GOVERNOR KERRY HEALEY LIEUTENANT GOVERNOR COMMONWEALTH OF MASSACHUSETTS Office of Consumer Affairs and Business Regulation DIVISION OF INSURANCE One South Station • Boston, MA 02110-2208 (617) 521-7794 • FAX (617) 521-7475 Springfield Office (413) 785-5526 TTY/TDD (617) 521-7490 http://www.state.ma.us/doi JANICE S. TATARKA DIRECTOR, CONSUMER AFFAIRS AND BUSINESS REGULATION JULIANNE M. BOWLER COMMISSIONER OF INSURANCE # BULLETIN 2006-05 TO: All Insurers and Insurance Producers with Property, Casualty or Personal Lines of Authority FROM: Julianne M. Bowler, Commissioner of Insurance DATE: June 1, 2006 RE: Federal Emergency Management Agency Flood Insurance Training Requirements for Insurance Producers Selling Through the National Flood Insurance Program and Recommendations Regarding the Sale of Flood Insurance The purpose of this Bulletin is to advise insurers and insurance producers of training requirements for selling flood insurance through the National Flood Insurance Program (“NFIP”) and to recommend to insurance producers that they advise homeowners of the availability of flood insurance. Federally-backed flood insurance is available through the NFIP, which is administered by the Federal Emergency Management Agency (“FEMA”). FEMA has implemented the minimum flood insurance training requirements for insurance producers, as set forth in Section 207 of the Flood Insurance Reform Act of 2004, Pub. L. 108-264, (the “Act”). Under the Act, FEMA, in cooperation with state insurance regulators, has developed flood insurance training requirements which are designed to ensure that insurance producers selling flood insurance under NFIP are properly trained and educated about the program. Under these requirements, all insurance producers licensed in property, casualty or personal lines of authority must complete a one-time course related to NFIP which will provide three (3) hours of continuing education credit. The NFIP flood insurance course is available through approved continuing education providers. The failure to comply with this continuing education requirement may jeopardize the insurance producer’s authority to write flood insurance through the NFIP. Pursuant to the Act and the Commissioner of Insurance’s authority under M.G.L. c. 175, § 177E, the Division is requiring all Massachusetts resident insurance producers who sell flood insurance through NFIP to comply with the minimum training requirements of Section 207 of the Act, and with basic flood education, as outlined at 70 FR 52117, or such later requirements as are published by FEMA, by no later than December 31, 2006. Bulletin 2006-05 June 1, 2006 Page 2 of 2 Licensed insurers shall demonstrate to the Division, upon request, that their licensed and appointed producers who sell flood insurance through NFIP in Massachusetts have complied with the minimum flood insurance training requirements, as described above. Additionally, the Division recommends when an insurance producer is either selling or renewing a home insurance policy, it would be prudent for the insurance producer to advise all applicants of the availability of flood insurance through NFIP. If, after being advised of the availability of flood insurance, an applicant declines the coverage, it would be prudent for the insurance producer to have the applicant sign or initial a statement indicating that the applicant was advised of the availability of the coverage, but declined to purchase it. This statement should be maintained by the insurance producer as part of the applicant's file. Insurance producers can get more information about the NFIP by visiting FEMA's NFIP website at http://www.fema.gov/business/nfip/. Questions from insurance producers regarding this Bulletin should be addressed to Diane Silverman Black, Director of Producer Licensing, who may be reached at (617) 521-7450. Questions from insurers should be addressed to Kevin Beagan, Deputy Commissioner and Director of the State Rating Bureau, at (617) 521-7323.