The National Flood Insurance Program: factors affecting actuarial soundness
DIANE Publishing, 2010 - 52 pages
The vast majority of homes and small commercial buildings that are insured against flood damage in the U.S. are covered by the Nat. Flood Insur. Program (NFIP). Although the flood insurance (FI) program had been largely self-sustaining in the past, it had to borrow $17 billion from the federal Treasury to pay claims after the catastrophic hurricanes of 2005. That borrowing has highlighted questions about the program┐s financial health, including the actuarial soundness of the premium rates charged on policies that are not explicitly subsidized and the cost of paying claims for properties that have suffered multiple flood losses. This report explains how NFIP sets ┐full-risk┐ premium rates for the FI program. Charts and tables.
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