SUMMARY: The Federal Insurance Administration (FIA) gives notice that it has rescinded Policy Issuance 5-95, Rebating Agents' Commissions, issued on October 4, 1995, and requests public comments on rebating of insurance agents' commissions to consumers under the National Flood Insurance Program (NFIP). DATES: We invite your comments which should be submitted within March 14, 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: 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.\1\ \1\ Not published in the Federal Register. Dated: December 12, 1995. Elaine A. McReynolds, Federal Insurance Administrator. [FR Doc. 95-30612 Filed 12-14-95; 8:45 am] BILLING CODE 6718-03-P
National Flood Insurance Program; Rebating Agents' Commissions
The Federal Insurance Administration (FIA) gives notice that it has rescinded Policy Issuance 5-95, Rebating Agents' Commissions, issued on October 4, 1995, and requests public comments on rebating of insurance agents' commissions to consumers under the National Flood Insurance Program (NFIP).