Frank Nutter, president of the Reinsurance Association of America, takes a look at how the NFIP can be protected from a soggy end.
As the historic and devastating floodwaters in the south eastern US receded in early March, many residents relied on their federal flood insurance policies to help rebuild homes and businesses. But if lawmakers do not act soon to strengthen federal flood insurance for the future, when the next catastrophic storm hits the programme will be under even more pressure than it already is.
Congress created the National Flood Insurance Program (NFIP) in 1968 to provide flood insurance in exchange for community adoption and enforcement of ordinances that meet or exceed Federal Emergency Management Agency (FEMA) requirements to reduce the risk of flooding. Unfortunately, the NFIP is now suffering from chronic multibillion-dollar debt that threatens to compromise its fiscal integrity. If the status quo continues, the programme will not be sustainable.
The good news is that there are ways to shore up the programme’s finances.
National Flood Insurance Program, Reinsurance Association of America, Federal Emergency Management Agency, Frank Nutter, North America