Federal Emergency Management Agency: Ongoing Challenges Facing the National Flood Insurance Program Page: 3 of 20
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Mr. Chairman and Members of the Committee:
I appreciate the opportunity to participate in today's hearing on the
National Flood Insurance Program (NFIP) and the challenges facing the
Federal Emergency Management Agency (FEMA), which oversees it. As
you know, the NFIP has been on GAO's high-risk list since March 2006,
and my statement today focuses on the ongoing challenges facing the
program. Over the past three decades, we have identified numerous
challenges to the program that affect its day-to-day operations and future
financial stability. Recently, we reported on NFIP's unprecedented
financial and regulatory strains in the aftermath of the 2005 hurricane
season.' As a result, the program has had to borrow extensively from the
U.S. Treasury in order to pay claims and expenses. With the current
program expiring next September, this and other issues warrant review
and debate, including how best to structure the NFIP so that it provides
financial protection for those who need and would benefit from flood
insurance while enhancing the program's financial foundation.
My testimony today will revisit and update the four major challenges
facing the NFIP:
* Reducing losses to the program from policy subsidies and repetitive
loss properties-that is, properties in high-risk areas that flood
repeatedly and that make repeated claims on the NFIP;
* Increasing property owner participation in the program to include not
only homeowners in high-risk areas, but also those who live in less
flood-prone areas that are still at risk of experiencing losses from
* Developing accurate, digital flood maps that can provide the
information the program needs to determine which areas are most at
risk of flooding; and
* Providing effective oversight of flood insurance operations to ensure
that the NFIP is making appropriate payments to the insurance
companies, insurance agents, and claims adjusters responsible for the
day-to-day process of selling and servicing flood insurance policies.
'GAO, National Flood Insurance Program: New Process Aided Hurricane Katrina
Claims Handling, but FEMA's Oversight Should Be Improved, GAO-07-169 (Washington,
D.C.: Dec. 15, 2006).
GAO-08-118T Flood Insurance
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United States. Government Accountability Office. Federal Emergency Management Agency: Ongoing Challenges Facing the National Flood Insurance Program, text, October 2, 2007; Washington D.C.. (digital.library.unt.edu/ark:/67531/metadc291590/m1/3/: accessed April 19, 2018), University of North Texas Libraries, Digital Library, digital.library.unt.edu; crediting UNT Libraries Government Documents Department.