RISK MANAGEMENT
RISK RATING 2.0 : FEMA RELEASES MORE GUIDANCE AHEAD OF IMPLEMENTATION
With FEMA ’ s new pricing methodology for the National Flood Insurance Program ( NFIP ) to be implemented October 1 , use these new resources to prepare for the change .
BY WYATT STEWART
Risk Rating 2.0 , FEMA ’ s new pricing methodology for the National Flood Insurance Program ( NFIP ), is scheduled to be implemented on October 1 , 2021 .
All new policies effective on or after October 1 must be issued under Risk Rating 2.0 . Existing policies renewing with effective dates between October 1 , 2021 , and March 31 , 2022 , can renew under the legacy rating plan or renew their policy under Risk Rating 2.0 . On or after April 1 , 2022 , all existing policies with renewal dates will be renewed under Risk Rating 2.0 .
With implementation nearing , FEMA just released the Risk Rating 2.0 edition of the NFIP Flood Insurance Manual ( FIM ) effective October 1 . This edition of the FIM provides guidance for administering NFIP policies written under the new pricing methodology .
Additionally , FEMA created the “ Roadmap to the Risk Rating 2.0 Flood Insurance Manual ” to help navigate from the April 2021 legacy FIM to the October 2021 Risk Rating 2.0 FIM . The document provides a crosswalk of legacy FIM content alongside information about where to locate that content in the Risk Rating 2.0 FIM .
FEMA also released the Industry Transition Memorandum ( ITM ) effective October 1 as an attachment to Write-
Be sure to visit FEMA ' s or Selective ' s website for NFIP updates due to the limited publication dates .
Your-Own Bulletin w-21012 ITM . The ITM explains how the transition from the legacy rating plan to Risk Rating 2.0 will occur and provides business , data , and information technology guidance for NFIP insurers and vendors on how to accomplish that transition .
In addition , FEMA has updated the NFIP Services page to provide access to the latest documents for Risk Rating 2.0 . The Big “ I ” believes that Risk Rating 2.0 , if properly implemented , can improve the NFIP experience for agents and consumers but emphasizes that the program ’ s rollout will be critical in determining the success of the effort .
As FEMA continues to provide more information regarding Risk Rating 2.0 , the Big “ I ” will continue to provide members with updates in the weekly News & Views e-newsletter .
Wyatt Stewart is Big “ I ” assistant vice president of federal government affairs .
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