Flood Insurance: Public Policy Goals Provide a Framework for Reform, Statement of Orice Williams Brown, Managing Director, Financial Markets and Community Investment, Testimony Before the Committee on Banking, Housing, and Urban Affairs, U.S. Senate [open pdf - 317KB]
From the opening statement of Orice Williams Brown:"The National Flood Insurance Program (NFIP) has been on Government Accountability Office's(GAO) high-risk list since 2006, when the program had to borrow from the U.S. Treasury to cover losses from the 2005 hurricanes. The outstanding debt is $17.8 billion as of June 2011. This sizeable debt, plus operational and management challenges that GAO has identified at the Federal Emergency Management Agency (FEMA), which administers NFIP, have combined to keep the program on the high-risk list. NFIP's need to borrow to cover claims in years of catastrophic flooding has raised concerns about the program's long-term financial solvency. This testimony (1) discusses ways to place NFIP on a sounder financial footing in light of public policy goals for federal involvement in natural catastrophe insurance and (2) highlights operational and management challenges at FEMA that affect the program. In preparing this statement, GAO relied on its past work on NFIP, including a June 2011 report on FEMA's management of NFIP, which focused on its planning, policies, processes, and systems. The management review included areas such as strategic and human capital planning, acquisition management, and intra-agency collaboration. GAO has made numerous recommendations aimed at improving financial controls, oversight of private insurers and contractors, and FEMA's management of NFIP. Department of Homeland Security (DHS) generally agreed with our recommendations."
Government Accountability Office: http://gao.gov