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    Subject Term: "Insurance rates"

    9 publications with a total of 12 open recommendations
    Director: Alicia Puente Cackley
    Phone: (202) 512-8678

    1 open recommendations
    Recommendation: As Congress considers reauthorizing NFIP, it should consider comprehensive reform to improve the program's solvency and enhance the nation's resilience to flood risk, which could include actions in six areas: (1) addressing the current debt, (2) removing existing legislative barriers to FEMA's revising premium rates to reflect the full risk of loss, (3) addressing affordability, (4) increasing consumer participation, (5) removing barriers to private-sector involvement, and (6) protecting NFIP flood resilience efforts. In implementing these reforms, Congress should consider the sequence of the actions and their interaction with each other.

    Agency: Congress
    Status: Open

    Comments: When we determine what steps the Congress has taken, we will provide updated information.
    Director: Alicia Puente Cackley
    Phone: (202) 512-8678

    1 open recommendations
    Recommendation: To improve the transparency and accountability over the compensation paid to WYO companies and set appropriate compensation rates, the FEMA administrator should take into account WYO company characteristics that may impact companies' expenses and profits when developing the new compensation methodology and rates.

    Agency: Department of Homeland Security: Directorate of Emergency Preparedness and Response: Federal Emergency Management Agency
    Status: Open

    Comments: According to FEMA officials, FEMA is responding to this recommendation as part of its development of a final rule on WYO compensation practices, required by the Biggert-Waters Act.
    Director: Alicia Puente Cackley
    Phone: (202) 512-8678

    1 open recommendations
    Recommendation: To address a potential challenge for consumers who wish to opt for private flood insurance and who must have insurance under the mandatory purchase requirement, the FEMA Administrator should consider reinstating the cancellation reason code allowing policyholders to cancel their NFIP policy and be eligible for premium refunds, on a prorated basis, if they obtain a non-NFIP policy after their NFIP policy became effective. If changes are needed to NFIP's standard flood insurance policy to allow such refunds, FEMA should take the necessary steps to amend its standard flood insurance policy.

    Agency: Department of Homeland Security: Directorate of Emergency Preparedness and Response: Federal Emergency Management Agency
    Status: Open

    Comments: FEMA agreed with our recommendation and stated it would reinstate the cancellation code allowing policyholders to cancel their NFIP policy and be eligible for premium refunds in an April 2017 bulletin, effective October 1, 2017, followed up by a subsequent rulemaking. However, as of November 2017, the bulletin had not been issued. In May 2017, FEMA officials noted that the reinstatement of the cancellation code would be part of a proposed regulation package to be completed over the next several years.
    Director: Alicia Puente Cackley
    Phone: (202) 512-8678

    2 open recommendations
    Recommendation: To help ensure that adequate data collection efforts by state insurance regulators produce sufficient, reliable data to oversee the LPI market, NAIC should work with the state insurance regulators to develop and implement more robust policies and procedures for the collection of annual data from LPI insurers to ensure they are complete and reliable.

    Agency: National Association of Insurance Commissioners
    Status: Open

    Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
    Recommendation: To help ensure that adequate data collection efforts by state insurance regulators produce sufficient, reliable data to oversee the LPI market, NAIC should work with the state insurance regulators to complete efforts to obtain more detailed national data from LPI insurers.

    Agency: National Association of Insurance Commissioners
    Status: Open

    Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
    Director: Morris, Steve D
    Phone: (202) 512-3841

    2 open recommendations
    Recommendation: To better inform Congress in the future about crop insurance program costs, reduce present costs, and ensure greater actuarial soundness, the Administrator of the U.S. Department of Agriculture's Risk Management Agency should monitor and report on crop insurance costs in areas that have higher crop production risks.

    Agency: Department of Agriculture: Risk Management Agency
    Status: Open

    Comments: As of December 2016, the Department of Agriculture has not taken action to implement this recommendation.
    Recommendation: To better inform Congress in the future about crop insurance program costs, reduce present costs, and ensure greater actuarial soundness, the Administrator of the U.S. Department of Agriculture's Risk Management Agency should, as appropriate, increase its adjustments of premium rates in areas with higher crop production risks by as much as the full 20 percent annually that is allowed by law.

    Agency: Department of Agriculture: Risk Management Agency
    Status: Open

    Comments: As of December 2016, the Department of Agriculture has not taken action to implement this recommendation.
    Director: Michael Courts
    Phone: (202) 512-8980

    1 open recommendations
    Recommendation: The Secretary of State should direct State's Office of the Procurement Executive to incorporate leading practices into any future single insurer solicitations by determining whether existing guidance could be used, or by developing guidance based on leading practices in federal and State Department acquisition regulations and State internal control standards.

    Agency: Department of State
    Status: Open

    Comments: The Department of State concurred with the recommendation and said it would incorporate leading practices into any future single insurer solicitation if a determination is made to pursue a single insurer program. However, as of September 2017 State had not made a determination to pursue a single insurer program. GAO will continue to monitor State's effort to implement the recommendation.
    Director: Anne-Marie Fennell
    Phone: (202) 512-3841

    1 open recommendations
    Recommendation: To reduce the cost of the crop insurance program and achieve budgetary savings for deficit reduction or other purposes, Congress should consider reducing the level of federal premium subsidies for revenue crop insurance policies. In doing so, Congress should consider whether to make the full amount of this reduction in an initial year, or to phase in the full amount of this reduction over several years. In addition, Congress should consider directing the Secretary of Agriculture to monitor and report on the impact, if any, of the reduction on farmer participation in the crop insurance program.

    Agency: Congress
    Status: Open

    Comments: As of December 2016, Congress has not taken action to implement this matter.
    Director: Cackley, Alicia P
    Phone: (202) 512-8678

    1 open recommendations
    Recommendation: To establish full-risk rates for properties with previously subsidized rates that reflect their risk for flooding, the Secretary of the Department of Homeland Security (DHS) should direct the FEMA Administrator to develop and implement a plan, including a timeline, to obtain needed elevation information as soon as practicable.

    Agency: Department of Homeland Security
    Status: Open

    Comments: As we reported in February 2016 in GAO-16-190, FEMA has taken limited action to implement this recommendation. For example, FEMA noted that the agency would evaluate the appropriate approach for obtaining or requiring the submittal of information needed to determine full-risk rates for subsidized properties. FEMA also said it would explore technological advancements and engage with industry to determine the availability of technology, building information data, readily available elevation data, and current flood hazard data that could be used to implement the recommendation. However, FEMA officials also said that the agency faced a cost challenge with respect to elevation certificates and that obtaining these certificates could take considerable time and cost. They noted that requiring policyholders to incur the cost of obtaining elevation certificates would not be consistent with NFIP's policy objective to promote affordability. The officials added that the agency encourages subsidized policyholders who seek to ensure the appropriateness of their NFIP rates to voluntarily submit elevation documentation.
    Director: Williams, Orice M
    Phone: (202)512-5837

    2 open recommendations
    Recommendation: The Secretary of the Department of Homeland Security should direct FEMA to take steps to ensure that its rate-setting methods and the data it uses to set rates result in full-risk premiums rates that accurately reflect the risk of losses from flooding. These steps should include, for example, verifying the accuracy of flood probabilities, damage estimates, and flood maps; ensuring that the effects of long-term planned and ongoing development, as well as climate change, are reflected in the flood probabilities used; and reevaluating the practice of aggregating risks across zones.

    Agency: Department of Homeland Security
    Status: Open

    Comments: As of January 2017, FEMA is taking steps to verify the accuracy of flood probabilities by collecting and analyzing data from flood insurance studies. FEMA is also continuing to monitor the completion of these studies to determine when a statistically valid amount of data is available so that it can better assess flood risk. To verify the accuracy of damage estimates, FEMA is collecting data required to revise its estimates of flood damage and is undertaking studies to determine factors beyond flood water depth that contribute to flood damage. FEMA will incorporate that information into its rate-setting methodology as the necessary data becomes available. To verify the accuracy of flood maps, FEMA continues to reassess flood risk, evaluate coastal flood maps, and update its overall map inventory. To ensure that flood probabilities reflect long-term and ongoing planned development and climate change, FEMA is working with the Technical Mapping Advisory Committee to ensure the best available information on flood probabilities is used for rate-setting. In addition, as FEMA collects information on flood probabilities, it will conduct analyses to evaluate the practice of classifying risk across zones.
    Recommendation: The Secretary of the Department of Homeland Security should direct FEMA to ensure that information is collected on the location, number, and losses associated with existing and newly created grandfathered properties in NFIP and to analyze the financial impact of these properties on the flood insurance program.

    Agency: Department of Homeland Security
    Status: Open

    Comments: To assess the impact of grandfathered properties on the NFIP, as of January 2017, FEMA has begun to develop a process to obtain current zone designations for all existing policyholders. In addition, FEMA is requiring zone determination data to be updated as flood maps change. According to FEMA, this will allow officials to determine which policyholders are grandfathered but will not allow the determination of a property-specific rate in all circumstances.