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1 1 (October 11, 2023)

handle is hein.crs/govendy0001 and id is 1 raw text is: S Congressional ____ ~ Research Service ~~~~~~~~~~0 enomn thti~Itiedbt sne1I National Flood Insurance Program Borrowing Authority Updated October 11, 2023 This Insight evaluates the National Flood Insurance Program (NFIP) borrowing authority to receive loans from the Treasury and the current financial situation of the NFIP. NFIP Funding Funding for the NFIP is primarily maintained in an authorized account called the National Flood Insurance Fund (NFIF). The NFIP is funded from receipts from the premiums of flood insurance policies, including fees and surcharges; direct annual appropriations for specific costs of the NFIP (only for flood mapping); and borrowing from the Treasury when the NFIF's balance has been insufficient to pay the NFIP's obligations (e.g., insurance claims). Since the end of FY2017, 26 short-term NFIP reauthorizations have been enacted. For further details of these reauthorizations, see CRS Insight IN 10835, What Happens If the National Flood Insurance Program (NFIP) Lapses? The current reauthorization is set to expire on November 17, 2023. These extensions did not increase the NFIP's borrowing limit or provide additional funds to the NFIP. NFIP Borrowing Authority The NFIP was not designed to retain funding to cover claims for truly extreme events; instead, the National Flood Insurance Act of 1968 allows the program to borrow money from the Treasury for such events. For most of the NFIP's history, the program has been able to cover its costs, borrowing relatively small amounts from the Treasury to pay claims and to repay the loans with interest. Only current and future participants in the NFIP are responsible for repaying NFIP debt, as the insurance program itself owes the debt to the Treasury and pays for accruing interest on that debt through the premium revenues of policyholders. Since 2005, the NFIP has made six principal repayments totaling $2.82 billion and has paid $5.71 billion in interest. The program paid $300.44 million in interest in FY2022. Table 1 shows NFIP borrowing, repayments, and debt from FY1980 to FY2022. Comparable figures are not available before 1980. When the NFIP was established, the borrowing limit was $250 million. In Congressional Research Service https://crsreports.congress.gov IN10784 CRS INSIGHT Prepared for Members and Committees of Congress

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