Which of the following statements is FALSE regarding XYZ Insurance, a private insurer that sells flood insurance policies?

To clarify, the statement that XYZ Insurance participates in the NFIP Direct Program is not accurate because private insurers typically do not participate in the NFIP (National Flood Insurance Program) Direct Program. The NFIP is a program created by the federal government that primarily provides flood insurance through National Flood Insurance Program policies. Insurers in this program act as intermediaries for the government and are not considered private insurers in the same way that XYZ Insurance is described in the context of this question.

In contrast to the NFIP Direct Program, private insurers also have the ability to develop and offer their own private flood insurance policies, which is why the option indicating they can set their own flood coverage rates is correct. Additionally, private insurers that sell flood insurance must adhere to federal regulations established for flood insurance, ensuring compliance with guidelines that govern flood coverage. While XYZ Insurance may operate in multiple states, the statement about serving all states uniformly could be misleading, as insurers often have different business practices and coverage offerings based on specific state regulations and market conditions. Therefore, the assertion that XYZ Insurance participates in the NFIP Direct Program is indeed the false statement within this context.