Most state natural catastrophe programs do not charge premium rates that reflect the full risk of loss, according to a new report by the Government Accountability Office (GAO).
GAO said that six of 10 states charged rates that do not fully reflect risk of loss, potentially discouraging private market involvement.
State natural catastrophe programs in Alabama, California, Florida, Louisiana, Mississippi, North Carolina, New Jersey, South Carolina and Texas were reviewed for the report.
GAO also found that while most states were taking steps to address mitigation, support of public policy goals varied across the programs.
Officials of nine of the 10 state programs reviewed told GAO they are addressing or considering mitigation, including providing mitigation credits or attempting to develop a more effective mitigation plan.
According to GAO, public policy goals are: charging premium rates that reflect the risk of loss; encouraging broad participation; encouraging the private market to provide natural catastrophe insurance; and encouraging […]

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