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GAO-14-297R 1 (2014-04-09)

handle is hein.gao/gaobaahuh0001 and id is 1 raw text is: GAO U.S. GOVERNMENT ACCOUNTABILITY OFFICE 441 G St. N.W. Washington, DC 20548 April 9, 2014 The Honorable Randy Neugebauer Chairman Subcommittee on Housing and Insurance Committee on Financial Services House of Representatives Overview of GAO's Past Work on the National Flood Insurance Program Dear Mr. Chairman: Floods are the most common and destructive natural disaster in the United States. The National Flood Insurance Program (NFIP), which collected about $3.8 billion in premiums and insured about $1.3 trillion in property in 2013, is administered by the Federal Emergency Management Agency (FEMA). The program is a key component of the federal government's efforts to limit the damage and financial impact of floods. NFIP makes federally backed flood insurance available to property owners in participating communities. Additionally, through NFIP, FEMA maps floodplain boundaries, and requires participating communities to adopt and enforce floodplain management regulations that mitigate the effects of flooding. The program has faced significant ongoing financial and management challenges over the years. In particular, the program is unlikely to generate sufficient revenue to cover future catastrophic losses or repay billions of dollars borrowed from the Department of the Treasury (Treasury) to cover insurance claims from previous disasters. As a result, the program has been on GAO's High-Risk List since 2006.1 In July 2012, Congress enacted the Biggert-Waters Flood Insurance Reform Act of 2012 (Biggert-Waters Act), which contained provisions to help strengthen the future financial solvency and administrative efficiency of NFIP. The Biggert-Waters Act affected many aspects of NFIP. For example, it required FEMA to phase out almost all discounted insurance premiums (commonly referred to as subsidized premiums), establish a reserve fund, improve flood risk mapping, and develop new methods related to compensation for the companies that sell and service flood insurance policies.2 On March 21, 2014, Congress enacted the Homeowner Flood Insurance Affordability Act of 2014 (2014 Act), which repeals or alters portions of the Biggert- Waters Act.3 For example, the 2014 Act (1) permits certain premium subsidies removed by the 1Every 2 years, we provide Congress with an update on our High-Risk Program, which highlights major areas that are at high risk for fraud, waste, abuse, or mismanagement, or need broad reform. See GAO, High-Risk Series: An Update, GAO-13-283 (Washington, D.C.: Feb. 14, 2013). 2The Biggert-Waters Act left in place subsidies for a limited set of properties, including those behind certain unfinished or decertified levees and those in communities that are in the process of joining NFIP and therefore part of NFIP's emergency program. 3Homeowner Flood Insurance Affordability Act of 2014, Pub. L. No. 113-89 (Mar. 21, 2014). GAO-14-297R Flood Insurance

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