Cancellation Qualifying Reasons/RC 20

Reason Code 20: SRL Written with Incorrect Insurer

This reason code applies when a Severe Repetitive Loss (SRL) policy was issued or renewed by a Write Your Own (WYO) company instead of being serviced by the NFIP Direct’s Special Direct Facility (SDF). In these cases, the policy must be canceled and rewritten under the correct insurer.

Condition	Details
Eligibility for Cancellation	A policy may be canceled if an SRL property was incorrectly insured through a WYO company instead of the NFIP Direct’s Special Direct Facility (SDF).
Effective Date of Cancellation	The policy is canceled effective the date the property was designated as SRL.
Policy Terms Eligible for Refund	The current policy term.
Type of Refund	A full refund, including surcharges and fees, is sent to the SDF to issue a replacement policy.
Required Documentation	Property address confirmation from FEMA indicating the SRL designation.

This table can be seen on page 6-13 of the FIM.

Additional Guidance

• SRL policies must be serviced by the NFIP Direct’s Special Direct Facility and not by WYO companies.
• The insurer must verify that the property is designated as an SRL and confirm the correct policy servicing entity.
• Any paid claims under the incorrect policy must be reconciled before cancellation and rewriting.

Required Documents

To process this cancellation reason, underwriters must verify the documentation provided.

• FEMA confirmation that the property is designated as SRL.
• Documentation confirming the policy was written under the incorrect insurer.

Document Gallery

• FEMA SRL Confirmation: Official notification of SRL designation.
• Incorrect Insurer Documentation: Proof that the policy was issued under a WYO company instead of NFIP Direct.

Scenarios for Context

Scenario 1:
A homeowner’s SRL property was insured through a WYO company, but it should have been serviced by NFIP Direct. FEMA notifies the insurer, and the policy is canceled and rewritten through the SDF.

Scenario 2:
An underwriter discovers that an SRL-designated property was mistakenly renewed by a WYO carrier instead of NFIP Direct. The insurer confirms the designation with FEMA, cancels the policy, and transfers coverage to the correct entity.

This page contains details about NFIP Cancellations. Find more in the How To Cancel section of the NFIP Flood Insurance Manual.