Flood Insurance:

Information on Various Aspects of the National Flood Insurance Program

T-RCED-93-70: Published: Sep 14, 1993. Publicly Released: Sep 14, 1993.

Additional Materials:


Office of Public Affairs
(202) 512-4800

GAO discussed the Federal Insurance Administration's (FIA) National Flood Insurance Program (NFIP), focusing on the: (1) actuarial soundness of the NFIP Fund and the impact of eliminating subsidized flood insurance rates; (2) procedures used to set flood insurance rates; and (3) NFIP Fund's financial management problems. GAO noted that: (1) the NFIP Fund is not actuarily sound, since it does not have sufficient financial resources to meet future losses and Congress has not funded subsidies provided to insurance policyholders; (2) although requiring subsidized NFIP policyholders to pay actuarial rates could improve the fund's actuarial soundness, a significant number of policyholders could cancel their insurance which would increase other federal disaster relief assistance program costs; (3) it is unclear whether increased costs to other disaster relief programs would be less expensive than current subsidies; (4) 59 percent of NFIP policyholders pay actuarial rates based on actual risk exposure factors, while 41 percent NFIP policyholders pay rates based on estimated annual fund losses; (5) FIA does not have adequate systems or records to monitor the NFIP Fund balance; (6) serious problems with the NFIP financial management system and internal control structure prevent the accumulation and reporting of reliable financial information; and (7) FIA needs to establish a separate NFIP balance in the Treasury and reexamine its decision not to make short-term improvements in the NFIP financial management system.

Nov 17, 2020

Jul 16, 2020

Jun 25, 2020

Jun 11, 2020

Apr 28, 2020

Mar 9, 2020

Jan 28, 2020

Oct 8, 2019

Looking for more? Browse all our products here