Ariel Rivera advocates for long-term reauthorization with key reforms, including greater transparency in Risk Rating 2.0
WASHINGTON, May 25, 2022 /PRNewswire/ — The National Flood Insurance Program (NFIP) needs a long-term reauthorization and key reforms, according to testimony provided on May 25 before the House Financial Services Committee by the National Association of Professional Insurance Agents (PIA).
Testifying on behalf of PIA was Ariel Rivera, founder and agency principal of Deer Insurance Agency, an independent insurance agency located in Jacksonville, Florida. Born and raised in Puerto Rico, Rivera has over 18 years of experience in the industry and currently sells flood insurance both through the NFIP and the private market. He also serves as Secretary of the national PIA.
Rivera addressed a broad range of issues regarding the flood program, including PIA’s support of Risk Rating (RR) 2.0; the NFIP’s need for a long-term reauthorization; the importance of a continuous coverage provision; the benefits of creating an affordability framework; and the need for greater rate transparency.
Risk Rating 2.0
PIA strongly supports RR 2.0 because it will make the NFIP more solvent while also providing policyholders with more accurate information about their properties’ flood risk. With better information, we hope property owners will learn more about their risk of flood, engage in mitigation efforts where needed, and, ultimately, purchase flood insurance that matches their risk.
However, Rivera said, the RR 2.0 system lacks sufficient transparency.
“The rating engine was designed to take in data from agents and produce a rate, so the system does not show how it arrives at a particular rate,” he said. “Agents cannot see what effect any single data point has, making it nearly impossible for them to walk policyholders through the system’s process of building an increased rate. Policyholders deserve to understand how their data is being used to calculate their premiums,…