Selective’s Refund Tip Sheet for the
Homeowner Flood Insurance Affordability Act of 2014 (HFIAA)
Per FEMA guidelines, refunds are to begin October 1, 2014 and conclude by December 31, 2014. At Selective we
understand the importance of getting refund* money into the hands of eligible policyholders as quickly as possible, which is
why we will process all refunds within the first few weeks of October. For a summary of how Selective will process
these refunds as well as detailed guidance to help answer questions both you and your customers may have, read
through our Customer and Agency FAQ’s below.
Customer FAQ
Your Customers May Ask
How to Respond
The amount of your refund will be calculated using NFIP actuarial
rates as identified by the Homeowner Flood Insurance Affordability
Act of 2014 (HFIAA).
How much of a refund will I receive?
I thought my refund was going to be much
more, why is it so small?
Note: Agents will be able to view customer refunds within
Selective’s flood agency portal once the HFIAA endorsement is
completed and the refund transaction issued. Simply click on the
Account tab, then the refund line item. Once there, refunds are
indicated by a HFIAA memo under View Log Entries.
Your refund is based on rate increases implemented by BW12 and
repealed by the HFIAA. In some cases these reductions are
minimal – resulting in refunds starting at $1.
You should be receiving your refund check a few days after you
received your refund letter from Selective.
I got a letter that states I will be getting a
refund. When exactly will I receive it?
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If you received a letter from Selective before October 20 and have
yet to receive your refund, please let me know and I will gladly
research its status with Selective.
Otherwise, please be patient as the post office can take up to 10
business days to deliver standard first class mail.
Where will my refund be sent?
I have a mortgage on my property, will my
mortgage company be notified of my revised
flood policy premium and will my escrow be
corrected?
All refunds (regardless of whether your flood policy premium is
escrowed by your mortgage company) will be sent to the customer
address on file with Selective. If you have questions on whether
your escrow account will be reflective of your refund, please
contact your mortgage company.
Note: The primary policyholder will be the only name to appear on
the refund check.
A copy of the refund letter you received was also sent to your
mortgage company along with your new declarations page. I
suggest that you contact them directly to discuss any questions or
changes you may have about an adjustment to your escrow
account.
Note: Agents should verify that the mortgage company listed in the
system and on the policy is accurate with the customer. If it’s
incorrect, please submit an endorsement request to Selective with
the appropriate mortgage information.
Because there were changes made to your flood insurance policy
within the past year, we needed to cancel and re-issue your policy
to ensure accurate calculation and reporting of your new rates.
Why was my policy cancelled and re-issued?
Per NFIP requirements, Selective has to notify you that your policy
was cancelled via the cancel/re-issue notification letter.
A new policy has been issued using the same effective date and
coverage and you will receive your HFIAA refund check within the
next week or two.
I was required to obtain an elevation
certificate that is now no longer needed, will
I be reimbursed for its cost?
No, per FEMA guidelines the flood program will not be reimbursing
you for the cost of elevation certificates.
My policy lapsed last year; will I still receive
a refund?
All customers entitled to refunds will receive a refund letter from
Selective within the first couple weeks of October. If you received
this letter, you will receive a refund.
I recently purchased a home that is eligible
for a refund.
I assumed the policy from the previous
owner; will I receive a refund for the
previous owners flood policy?
Why did I receive a new declarations page?
For assumed flood policies, the party entitled to the refund would
be the current policyholder.
As part of the refund process Selective is required by the NFIP to
endorse your policy to account for the new rates associated with
HFIAA legislation. This endorsement process automatically
generates a new declarations page.
Agency FAQ
Questions You May Have
Selective’s Response
Selective will be processing all HFIAA refunds the first few
weeks of October. The amount of each refund is calculated
based upon the rates and increases that were implemented per
BW12 and will vary by customer.
When will my customer receive their HFIAA
refund check and how much will it be?
Refund amounts will be indicated on each customer letter included
with the revised declarations pages sent in early October.
To check on the status of a refund, please check
selectiveflood.com and if more than 10 days have passed since
the check was processed, please contact Selective’s customer
service department to research.
My customer has a mortgage company
and/or an additional insured listed on their
policy. Who will be listed on the refund
check?
Only the primary policyholder will be listed on the refund check.
If my customer purchased an Elevation
Certificate (EC) and now it’s no longer
needed, will they be reimbursed for the cost
of the EC?
No. FEMA is not going to reimburse policyholders for the costs
of obtaining an EC that was previously required by BW12.
However, in the future, policyholders may be reimbursed for EC
costs associated with a successful letter of map amendment
(LOMA) that removes the property from a special flood hazard area
(SFHA).
Are non-primary homes impacted by HFIAA
changes and are they eligible for a refund?
No. HFIAA legislation doesn’t impact non-primary policies that
were not previously required to use full risk rates. These policies
will continue to see the 25% increase as indicated by BW12.
Are agents obligated to return commissions
on policies receiving refunds?
No. Per FEMA, agency commissions on policies receiving
refunds will not be impacted retroactively however, commissions
on future renewals may be impacted as the revised premium
amounts may be lower than they were in the current term.
If a policy was issued with reduced coverage
based on full-risk premium rates prior to
issuing refunds, should coverage be
restored to the original requested amount
due to the restoration of Pre-FIRM
subsidized rates?
How do I know if my customer’s policy will
be cancelled and re-written rather than a
simple endorsement?
If a policy was cancelled or expired prior to
the implementation of the HFIAA refund
procedure, will they still receive a refund for
the earned portion of the premium eligible?
No. If coverage was reduced so the premium amount was
submitted under full-risk rating, the refund should be determined on
the basis of the coverage amount issued.
The refund may be applied to a coverage increase at the
policyholder’s request, with a standard 30-day waiting period, as
required by law.
If your customer’s policy had a mid-term monetary endorsement
made, the policy will need to be cancelled and re-issued.
Yes. A refund for the earned portion of the premium will be
generated if a policy otherwise eligible for a refund was cancelled
or expired prior to the implementation of the refund procedure.
E.g., A policy effective in October of 2013 was cancelled due to the
property being sold in January of 2014; therefore the policyholder
will receive a pro-rated refund for the period the property was
covered between October and January.
Not many cancelled policies are subject to a refund.
How will I know what cancelled policies will
receive a refund?
What documentation do I need to provide in
order for eligible cancelled policies to
receive their refund?
Is FEMA or Selective producing the HFIAA
refund check?
If you have any, Selective will send you a listing via e-mail. Since
we may not have the most current mailing address for these
policies, we will be relying on you, our agent to contact these
individuals wherever possible.
In order to process these refunds, Selective will you to provide us
the old policy number as well as the complete underwriting file,
insured name and current mailing address, so that we can submit
the refund request to the NFIP for processing.
The HFIAA refunds for cancelled or expired policies that were
impacted by BW12 rate increases will be processed by FEMA via
the iService Bureau and will be distributed with a cover letter from
the NFIP.
All other HFIAA refunds will be processed by Selective within the
first few weeks of October.
What timeframe does the iService Bureau
have to process cancelled/expired policy
HFIAA refunds?
I am getting questions from customers that I
am unable to answer, who can they call at
Selective for help?
FEMA’s iService Bureau will be processing HFIAA refunds within
the same time period as Selective (10/1/14 – 12/31/14).
Note: Processing of cancelled/expired refund requests may have a
slightly longer turnaround time to allow for additional verification or
research.
Selective will have additional staff on hand to help assist you in
best serving our mutual customers.
Customers can call our customer service line at (877) 348-0552. In
addition, if at any time you need assistance, please contact your
Underwriting Team or Flood Territory Manager.
Selective’s Refund Process
•
Policy Endorsement Refunds:
– Selective underwriters will process the endorsement per FEMA guidelines and generate a new declarations
page showing the revised annual premium.
– Revised declarations pages will be sent to each customer, with a letter explaining the process and disclosing
their eligible refund amount.
– The customer will also receive a copy of FEMA’s Refund Fact Sheet assisting in answering questions about
refund eligibility and calculations.
– A couple days after the refund has been processed, the refund check will be mailed to each customer
through a separate mailing.
– You will be able to access copies of revised declarations pages via the “My Documents” link on the Agency
Dashboard within our flood agency portal, accessible via www.selectiveflood.com.
– A sample of Selective’s letter being sent to customers can be found here.
•
Cancelled and Re-Written Policy Refunds:
– Selective underwriters will cancel and re-issue policies using the same effective and expiration dates to
ensure accurate reporting of new rates. This will generate a cancel/re-write letter and new declarations
page, which will be mailed to the customer.
– Once complete, the underwriter will process the refund, generating a revised declarations page with the
revised annual premium. This revised declarations page will be sent to each customer, with a letter
explaining the process and disclosing their eligible refund amount. The customer will also receive a copy of
FEMA’s Refund Fact Sheet to help assist in answering questions about refund eligibility and calculations.
– A couple days after the policy has been re-rated, the refund check will be mailed to each customer through a
separate mailing.
– You will be able to access copies of revised declarations pages via the “My Documents” link on the Agency
Dashboard within our flood agency portal, accessible via www.selectiveflood.com.
– Samples of the customer letters can be found here: Cancel/Re-Write Letter or Refund Letter.
*Eligibility for refunds of premium applies to policyholders where HFIAA:
•
Restores the subsidized rate for reinstated flood policies covering Pre-Flood Insurance Rate Map (FIRM) buildings whose owners were required to
pay the full-risk rate because the building was newly insured or purchased on or after July 6, 2012, for coverage effective on or after October 4,
2012. Note: Subsidized rates include rates authorized by the National Flood Insurance Act of 1968 that were less than the full-risk premium rate,
as determined by actuarial principles for buildings constructed before a community was adopted into the initial Flood Insurance Rate Map local
building ordinance.
•
Reduces the premium for flood policies that increased more than 18 percent, effective on or after March 21, 2014. Note: The 18 percent cap on
flood insurance premium increases does not apply to certain subsidized flood policies covering buildings in the following categories: Non-Primary
residences and Severe Repetitive Loss properties.
•
Rates associated with the refunds are determined by the NFIP and will not apply to policies where the full-risk rate is less than the
subsidized rate.
©2014 Selective Insurance Group, Inc. Insurers and products available vary by jurisdiction. These descriptions are summaries and not offers to sell insurance;
the actual policies show complete coverage, exclusions and limitations details. Policy issuance is subject to underwriting approval.
CONFIDENTIAL, UNPUBLISHED PROPERTY OF SELECTIVE INSURANCE COMPANY OF AMERICA.
DISTRIBUTION AND USE LIMITED TO APPOINTED SELECTIVE AGENTS.