H.R. 5608: To ensure that Write Your Own companies can sell private flood insurance products that compete with National Flood Insurance Program products.

This bill, known as H.R. 5608, aims to modify the existing regulations surrounding the National Flood Insurance Program (NFIP) in the United States. Specifically, it seeks to allow companies participating in the “Write Your Own” (WYO) program to offer private flood insurance products. Here’s a breakdown of what the bill entails:

Prohibition on Non-Compete Clauses

Currently, companies that are part of the Write Your Own Program, which allows insurance companies to sell federal flood insurance under their own brand, may be subject to restrictions on offering their own private flood insurance products. This bill removes these restrictions, meaning:

• Write Your Own Program Definition: The “Write Your Own Program” is a partnership between the Federal Emergency Management Agency (FEMA) and private insurance companies. Under this program, these companies can sell flood insurance and handle claims.
• Removal of Restrictions: The bill prohibits FEMA from imposing conditions that prevent these companies from selling private flood insurance while they participate in the WYO program.
• Future Agreements: Any new agreements made between FEMA and insurers after the bill is enacted cannot include clauses that would restrict the sale of private flood insurance.

Impact on Flood Insurance Options

By allowing WYO companies to sell private flood insurance, the bill is intended to increase competition in the flood insurance market. This could lead to several potential outcomes:

• Increased Choices: Policyholders may have more options available for purchasing flood insurance, potentially at varied price points and coverage levels.
• Competitive Pricing: With more companies able to offer flood insurance, competition could drive prices down, benefiting consumers.
• Diverse Coverage Solutions: Insurers may create innovative policies tailored to specific needs, leading to better protection against flood risks.

Implementation and Oversight

The bill outlines that the FEMA's Administrator is responsible for the implementation of these changes, ensuring no non-compete clauses are placed on participating insurers. This could enhance the effectiveness of the NFIP by integrating private sector solutions into the flood insurance landscape.

Relevant Companies

• ALL (Allstate Corporation): A significant player in the property and casualty insurance market, Allstate may expand its flood insurance offerings to include private policies if the bill passes.
• CB (Chubb Limited): Chubb could leverage this opportunity to provide more varied flood insurance solutions to its clients, broadening its market presence.
• ACE (Chubb Limited): As part of its reinsurance capabilities, Chubb might enhance its flood product lines to compete effectively with the NFIP.
• PRO (ProAssurance Corporation): This insurer may also enter the private flood insurance market, offering additional options to homeowners.
• USLI (United States Liability Insurance Group): USLI might explore tailored flood insurance products to meet new consumer demands driven by this legislative change.