[Federal Register Volume 61, Number 46 (Thursday, March 7, 1996)]
[Notices]
[Pages 9165-9166]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-5410]



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[[Page 9166]]


FEDERAL EMERGENCY MANAGEMENT AGENCY

National Flood Insurance Program; Rebating Agents' Commissions

AGENCY: Federal Insurance Administration (FEMA).

ACTION: Notice.

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SUMMARY: The Federal Insurance Administration (FIA) gives notice that 
it is extending the time for submission of public comments on rebating 
of insurance agents' commissions to consumers under the National Flood 
Insurance Program (NFIP).

DATES: Comments should be submitted on or before June 12, 1996.

ADDRESSES: Please submit your comments to the Rules Docket Clerk, 
Office of the General Counsel, Federal Emergency Management Agency, 500 
C Street SW., Washington, DC 20472, (facsimile) (202)646-4536.

FOR FURTHER INFORMATION CONTACT: Charles M. Plaxico, Jr., Chief, Claims 
and Underwriting Division, the Federal Insurance Administration, 500 C 
Street SW., Washington, DC 20472, (202) 646-3422.

SUPPLEMENTARY INFORMATION: On December 15, 1995 the Federal Insurance 
Administration (FIA) gave notice that it had rescinded Policy Issuance 
5-95, Rebating Agents' Commissions, issued on October 4, 1995, and 
requested public comments on rebating of insurance agents' commissions 
to consumers under the National Flood Insurance Program (NFIP) 
(Published at 60 FR 64436-64437, December 15, 1995). Comments were due 
by March 14, 1996. We have received a large number of responses to the 
notice, including one requesting extension of the comment period. In 
order to ensure the fullest opportunity for public comment on this 
issue, I hereby extend the period for submitting comments on rebating 
insurance agents' commissions to consumers under the NFIP for an 
additional 90 days or until June 12, 1996. For convenience of those 
reading this notice, I am repeating the supplementary information 
included in the December 15, 1995 notice.

    Where the practice is permitted by State law, licensed insurance 
agents may rebate a portion of the commission they earn for the sale 
of a given policy to the insured. This practice typically is used as 
a sales incentive and marketing tool. While the practice is 
prohibited in most States, a few States permit the practice. With 
more insurance producers and agents beginning to sell flood 
insurance policies, FIA wants the comments of as large a number of 
interested parties as possible in order to set policy on this issue.
    During the past year, FIA received a number of inquiries from 
producers and Write Your Own (WYO) Companies concerning the rebating 
of insurance agents' commissions on NFIP policies. FIA consulted 
with the following three committees that advise the FIA on 
insurance-related issues: the Flood Insurance Producers National 
Committee; the Insurance Institute for Property Loss Reduction Flood 
Insurance Committee; and the Write Your Own Marketing Committee. The 
Insurance Institute for Property Loss Reduction Flood Insurance 
Committee did not comment as a committee, but two member companies 
on that committee responded as individual companies.
    On October 4, 1995, FIA issued National Flood Insurance Program 
(NFIP) Policy Issuance 5-95 which prohibited, under the NFIP, the 
practice of agents' rebating commissions to consumers. We now 
rescind Policy Issuance 5-95. Since October 4 interested parties 
from within and outside the insurance industry have expressed 
divergent views on how FIA should treat the issue of rebating 
agents' commissions. In light of the diversity of opinion on this 
issue, FIA has decided to increase the circle of its advisers and to 
solicit comments and recommendations from a wider audience than 
before on the most appropriate policy on the rebating issue.

    Dated: March 1, 1996.
Elaine A. McReynolds,
Federal Insurance Administrator.
[FR Doc. 96-5410 Filed 3-6-96; 8:45 am]
BILLING CODE 6718-03-P