Flood Insurance: Financial Resources May Not Be Sufficient to Meet Future Expected Losses
RCED-94-80 Published: Mar 21, 1994. Publicly Released: Apr 15, 1994.
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Pursuant to a congressional request, GAO reviewed the financial condition of the National Flood Insurance Program, focusing on the: (1) actuarial soundness of the program; (2) potential financial impacts of increasing subsidized flood insurance rates and enhancing program participation; and (3) procedures used to set flood insurance rates.
Matter for Congressional Consideration
|Congress should consider any attempt to revise the flood insurance program in ways that will affect program participation, such as by expanding or strengthening the mandatory purchase requirement in the context of the integral relationship between this program and other disaster assistance programs. Similarly, a revision of the subsidized premium rate structure that would eliminate all or part of the present subsidy should be analyzed in the context of the potential financial impact on other federal disaster assistance programs through, for example, the possible cancellation of policies by policyholders.||Legislation signed by the President on September 23, 1994, calls for a study of the impact of eliminating the subsidy on pre-FIRM properties, including the cancellation of insurance policies.|