Congress lets insurers abandon risky flood customers to federal program
H.R. 5608 — To ensure that Write Your Own companies can sell private flood insurance products that compete with National Flood Insurance Program products. · Filed by W. Steube (R-FL) · 2 cosponsors · Introduced Sep 26, 2025 · Referred to committee
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What it does
This bill prohibits the Federal Emergency Management Agency (FEMA) from requiring Write Your Own (WYO) insurance companies—private insurers that sell federal flood insurance under their own brand names—to agree not to sell competing private flood insurance products. Currently, FEMA can impose non-compete clauses as a condition of participation in the WYO program; this bill strips that power away, allowing WYO companies to simultaneously sell both NFIP-backed policies and their own private flood insurance.
Why we flagged it
The bill removes a regulatory constraint (non-compete authority) that FEMA currently holds over private insurers participating in a federal program. It is functionally a deregulation measure that expands private-sector competitive scope at the expense of federal program control.
What the text implies
- Allows WYO companies to segment the flood insurance market by risk profile: private insurers can offer coverage to low-risk properties while NFIP absorbs higher-risk, less profitable customers, potentially destabilizing the federal program's actuarial balance.
- NFIP may face premium pressure if it loses low-risk customers to private competitors, forcing rate increases on remaining policyholders who are disproportionately higher-risk or in underserved areas.
The full analysis lists 4 implications of this text.
Who stands to gain
private property insurance companies (WYO program participants); insurance agents and brokers (expanded commission opportunities); insurance adjustment organizations