Legislative proposals to reform the National Flood Insurance Program (NFIP) were once again up for debate at a hearing before the U.S. House Financial Services Subcommittee on Housing and Community Opportunity yesterday. The NFIP recently was granted another temporary extension until May 31. The renewal is retroactive to March 28, covering the more than two-week period (March 28-April 15) when Congressional inaction effectively allowed the program to lapse. In testimony at yesterday’s hearing, Orice Williams Brown, of the Government Accountability Office (GAO) noted that the NFIP is not actuarially sound. Key points made by GAO are:

While NFIP’s financial condition has improved slightly due to an increase in the number of policyholders and moderate flood losses, it is unlikely to pay off its full $18.8 billion debt, especially if it faces catastrophic loss years.
Many property owners are paying premium rates that do not reflect the full, long-term risk of flooding. Almost […]

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