{ "id": "R46095", "type": "CRS Report", "typeId": "REPORTS", "number": "R46095", "active": true, "source": "EveryCRSReport.com", "versions": [ { "source": "EveryCRSReport.com", "id": 612228, "date": "2019-12-23", "retrieved": "2020-01-02T13:31:53.680201", "title": "The National Flood Insurance Program: Selected Issues and Legislation in the 116th Congress ", "summary": "The National Flood Insurance Program (NFIP) was established by the National Flood Insurance Act of 1968 (NFIA; 42 U.S.C. \u00a74001 et seq.), and was most recently reauthorized until September 30, 2020 (P.L. 116-93). The general purpose of the NFIP is both to offer primary flood insurance to properties with significant flood risk, and to reduce flood risk through the adoption of floodplain management standards. A longer-term objective of the NFIP is to reduce federal expenditure on disaster assistance after floods. The NFIP also engages in many \u201cnon-insurance\u201d activities in the public interest: it disseminates flood risk information through flood maps, requires community land use and building code standards, and offers grants and incentive programs for household- and community-level investments in flood risk reduction. Unless reauthorized or amended by Congress, the following will occur on September 30, 2020: (1) the authority to provide new flood insurance contracts will expire and (2) the authority for NFIP to borrow funds from the Treasury will be reduced from $30.425 billion to $1 billion. \nIssues that Congress may consider in the context of reauthorization include (1) NFIP solvency and debt; (2) premium rates and surcharges; (3) affordability of flood insurance; (4) increasing participation in the NFIP; (5) the role of private insurance and barriers to private sector involvement; (6) non-insurance functions of the NFIP such as floodplain mapping and flood mitigation; and (7) future flood risks, including future catastrophic events. \nThe Federal Emergency Management Agency (FEMA) has identified the need to increase flood insurance coverage across the nation as a major priority for the current reauthorization and beyond, with a goal of doubling flood insurance coverage by 2023 through the increased sale of both NFIP and private policies. The NFIP\u2019s premium rates do not reflect the full risk of loss because of various legislative requirements, which may exacerbate the program\u2019s fiscal exposure. The categories of properties which pay less than the full risk-based rate are determined by the date when the structure was built relative to the date of adoption of a Flood Insurance Rate Map, rather than the flood risk or the ability of the policyholder to pay. A reformed NFIP rate structure could have the effect of encouraging more private insurers to enter the primary flood market; however, full risk-based premiums could be unaffordable for some households. \nAlthough the NFIP has always had borrowing authority from Congress, an approach has not been developed by which the NFIP can repay catastrophic flood losses. To ensure the future financial solvency of the NFIP after catastrophic events, FEMA has suggested that a systematic analysis may consider the costs and benefits of using the reserve fund, borrowing authority, reinsurance, other forms of risk transfer, and perhaps a Treasury backstop at some catastrophic loss level.\nThe House Financial Services Committee reported a bill for the long-term reauthorization of the NFIP, the National Flood Insurance Program Reauthorization Act of 2019 (H.R. 3167), on October 28, 2019. One bill has been introduced in the Senate, on July 18, 2019, to reauthorize the expiring provisions of the NFIP: the National Flood Insurance Program Reauthorization and Reform Act of 2019 (S. 2187), with a House companion bill (H.R. 3872) introduced on July 22, 2019.\nThis report identifies issues for congressional consideration as part of the possible reauthorization of the NFIP and outlines selected provisions that relate to the issues listed above in the bills to reauthorize the NFIP in the 116th Congress (H.R. 3167 and S. 2187).", "type": "CRS Report", "typeId": "REPORTS", "active": true, "formats": [ { "format": "HTML", "encoding": "utf-8", "url": "https://www.crs.gov/Reports/R46095", "sha1": "67265c00e149f231f5774f23dbfdf751e004e63b", "filename": "files/20191223_R46095_67265c00e149f231f5774f23dbfdf751e004e63b.html", "images": {} }, { "format": "PDF", "encoding": null, "url": "https://www.crs.gov/Reports/pdf/R46095", "sha1": "6d9d873166a2eb8d734d3f82c11100486e677d38", "filename": "files/20191223_R46095_6d9d873166a2eb8d734d3f82c11100486e677d38.pdf", "images": {} } ], "topics": [ { "source": "IBCList", "id": 4845, "name": "Federal Emergency Management" } ] }, { "source": "EveryCRSReport.com", "id": 610308, "date": "2019-12-02", "retrieved": "2019-12-13T15:09:02.773851", "title": "The National Flood Insurance Program: Selected Issues and Legislation in the 116th Congress ", "summary": "The National Flood Insurance Program (NFIP) was established by the National Flood Insurance Act of 1968 (NFIA, 42 U.S.C. \u00a74001 et seq.), and was most recently reauthorized until December 20, 2019 (P.L. 116-69). The general purpose of the NFIP is both to offer primary flood insurance to properties with significant flood risk, and to reduce flood risk through the adoption of floodplain management standards. A longer-term objective of the NFIP is to reduce federal expenditure on disaster assistance after floods. The NFIP also engages in many \u201cnon-insurance\u201d activities in the public interest: it disseminates flood risk information through flood maps, requires community land use and building code standards, and offers grants and incentive programs for household- and community-level investments in flood risk reduction. Unless reauthorized or amended by Congress, the following will occur on December 20, 2019: (1) the authority to provide new flood insurance contracts will expire and (2) the authority for NFIP to borrow funds from the Treasury will be reduced from $30.425 billion to $1 billion. \nIssues which Congress may consider in the context of reauthorization include (1) NFIP solvency and debt; (2) premium rates and surcharges; (3) affordability of flood insurance; (4) increasing participation in the NFIP; (5) the role of private insurance and barriers to private sector involvement; (6) non-insurance functions of the NFIP such as floodplain mapping and flood mitigation; and (7) future flood risks, including future catastrophic events. \nThe Federal Emergency Management Agency (FEMA) has identified the need to increase flood insurance coverage across the nation as a major priority for the current reauthorization and beyond, with a goal of doubling flood insurance coverage by 2023 through the increased sale of both NFIP and private policies. The NFIP\u2019s premium rates do not reflect the full risk of loss because of various legislative requirements, which may exacerbate the program\u2019s fiscal exposure. The categories of properties which pay less than the full risk-based rate are determined by the date when the structure was built relative to the date of adoption of a Flood Insurance Rate Map, rather than the flood risk or the ability of the policyholder to pay. A reformed NFIP rate structure could have the effect of encouraging more private insurers to enter the primary flood market; however, full risk-based premiums could be unaffordable for some households. \nAlthough the NFIP has always had borrowing authority from Congress, an approach has not been developed by which the NFIP can repay catastrophic flood losses. To ensure the future financial solvency of the NFIP after catastrophic events, FEMA has suggested that a systematic analysis may consider the costs and benefits of using the reserve fund, borrowing authority, reinsurance, other forms of risk transfer, and perhaps a Treasury backstop at some catastrophic loss level.\nThe House Financial Services Committee reported a bill for the long-term reauthorization of the NFIP, the National Flood Insurance Program Reauthorization Act of 2019 (H.R. 3167), on October 28, 2019. One bill has been introduced in the Senate, on July 18, 2019, to reauthorize the expiring provisions of the NFIP: the National Flood Insurance Program Reauthorization and Reform Act of 2019 (S. 2187), with a House companion bill (H.R. 3872) introduced on July 22, 2019.\nThis report identifies issues for congressional consideration as part of the possible reauthorization of the NFIP, and outlines selected provisions which relate to the issues listed above in the bills to reauthorize the NFIP in the 116th Congress (H.R. 3167 and S. 2187).", "type": "CRS Report", "typeId": "REPORTS", "active": true, "formats": [ { "format": "HTML", "encoding": "utf-8", "url": "https://www.crs.gov/Reports/R46095", "sha1": "b7c052ff50a47257c7fcbb1474f5b6c0ca6df3b9", "filename": "files/20191202_R46095_b7c052ff50a47257c7fcbb1474f5b6c0ca6df3b9.html", "images": {} }, { "format": "PDF", "encoding": null, "url": "https://www.crs.gov/Reports/pdf/R46095", "sha1": "844c0c834f231f517d56a306015bf5a20e78dcac", "filename": "files/20191202_R46095_844c0c834f231f517d56a306015bf5a20e78dcac.pdf", "images": {} } ], "topics": [ { "source": "IBCList", "id": 4845, "name": "Federal Emergency Management" } ] } ], "topics": [ "Economic Policy" ] }