Flood insurance training requirements for insurance producers with a property line of authority selling through the National Flood Insurance Program (NFIP)

STATE OF MICHIGAN

DEPARTMENT OF LABOR AND ECONOMIC GROWTH

OFFICE OF INSURANCE AND FINANCIAL SERVICES

Bulletin 2007-07-INS

In the matter of:

Flood insurance training requirements for insurance producers with a property line

of authority selling through the National Flood Insurance Program (NFIP)

I

Issued and entered

This

day of June 2007

By Linda A. Watters

Commissioner

The purpose of this bulletin is to advise insurers and Michigan resident insurance

producers of training requirements for selling federally-backed flood insurance through

the National Flood Insurance Program (NFIP). Section 207 of the Federal Flood

Insurance Reform Act of 2004 (Act), requires all producers selling flood insurance

policies under the NFIP to be properly trained and educated about the NFIP to ensure

producers may best serve their clients.

The ~ c t '

directs the Director of the Federal Emergency Management Agency (FEMA),

in cooperation with the insurance industry, State insurance regulators, and other

interested parties to establish minimum training and education requirements for all

insurance agents who sell flood insurance policies. FEMA and state approved continuing

education providers have developed courses related to the NFIP. An insurance producer

who sells flood insurance may satisfy the minimum training and education requirements

of the Act by completing a course related to the NFIP. Failure to comply with the training

and education requirements of the Act will jeopardize an insurance producer's authority

to write insurance through the NFIP.

An insurance producer who chooses to satisfy the training and education requirements of

the Act by successhlly completing a course related to the NFIP that has been approved

-

' SUPPLEMENTARY INFORMATION: On June 30,2004 the President signed the Bunning-Bereuter-

Blumenauer Flood Insurance Reform Act of 2004 (Flood Insurance Reform Act of 2004), Pub. L. 108-264

rite insurance through the NFIP.

An insurance producer who chooses to satisfy the training and education requirements of

the Act by successhlly completing a course related to the NFIP that has been approved

-

' SUPPLEMENTARY INFORMATION: On June 30,2004 the President signed the Bunning-Bereuter-

Blumenauer Flood Insurance Reform Act of 2004 (Flood Insurance Reform Act of 2004), Pub. L. 108-264.

Section 207 of the Flood Insurance Reform Act of 2004 states:

The Director of the Federal Emergency Management Agency shall, in cooperation with the insurance

industry, State insurance regulators, and other interested parties (1) Establish minimum training and

education requirements for all insurance agents who sell flood insurance policies, and (2) Not later than 6

months after the date of enactment of this Act, publish these requirements in the Federal Register, and

inform insurance companies and agents of the requirements.

by the Michigan Office of Financial and Insurance Services (OFIS) under Section 1204c

of the Michigan Insurance Code (Code). (MCL 500.1204c), will receive three hours of

continuing education credit from OFIS. FEMA has not filed its online NFIP course for

approval by OFIS, so the FEMA online course does not currently qualify for Michigan

continuing education credit.

All Michigan licensed resident insurance producers who sell federal flood insurance

policies must comply with the minimum training requirements of section 207 of the Act,

and basic flood education as outlined at 70 Fed. Reg., 521 17 (Sept. 1,2005) 2, or such

later requirements as are published by FEMA, whether or not they receive Michigan

continuing education credit for the course work.

Licensed insurers must demonstrate to the OFIS Commissioner, upon request, that their

licensed and appointed producers who sell federal flood insurance policies through NFIP

have complied with the minimum federal flood insurance training requirements, as

described above

requirements as are published by FEMA, whether or not they receive Michigan

continuing education credit for the course work.

Licensed insurers must demonstrate to the OFIS Commissioner, upon request, that their

licensed and appointed producers who sell federal flood insurance policies through NFIP

have complied with the minimum federal flood insurance training requirements, as

described above.

Any questions regarding this bulletin should be directed to:

Office of Financial and Insurance Services

Regulatory Compliance Division

6 1 1 West Ottawa Street

P.O. Box 30220

Lansing, Michigan 48909-7720

Phone: (5 17) 373-7228

Toll Free: (877) 999-6442

W

G

d

k

L&da A. Watters

Commissioner

This notice describes FEMA's implementation of section 207 of the Flood Insurance Reform Act of 2004.

As required by the Act, FEMA has coordinated with the State insurance regulators, the insurance industry,

and other interested parties. Input received from these organizations emphasizes the value of working

through the State insurance departments to avoid establishing conflicting or burdensome training

requirements upon insurance agents. While implementing the minimum training requirements required by

section 207, FEMA has been mindful of the Senate Report language, (S. REP. NO. 108-262, at 4 & 9

(2004)), which cautions: In some cases, states may already have requirements to ensure that agents are well

versed in the flood insurance program. Where possible, FEMA should work to make sure that agents are

not burdened with inconsistent state and federal training and education requirements. In addition, where

possible, FEMA should work to implement the training requirements through the states, which already

have continuing education processes in place.