The Nat. Flood Insurance Program (NFIP), established in 1968, provides policyholders with insurance coverage for flood damage. FEMA is responsible for managing NFIP. Unprecedented losses from the 2005 hurricane season and NFIP¿s periodic need to borrow from the U.S. Treasury to pay flood insurance claims have raised concerns about the program¿s long-term financial solvency. Because of these concerns and NFIP¿s operational issues, NFIP has been on a high-risk list since March 2006. As of April 2010, NFIP¿s debt to Treasury stood at $18.8 billion. This testimony discusses: (1) NFIP¿s financial challenges; (2) FEMA¿s operational and management challenges; and (3) actions needed to address these challenges. Includes recommendations.

"The National Flood Insurance Program (NFIP), established in 1968, provides policyholders with insurance coverage for flood damage. The Federal Emergency Management Agency (FEMA) within the Department of Homeland Security is responsible for managing NFIP. Unprecedented losses from the 2005 hurricane season and NFIP's periodic need to borrow from the U.S. Treasury to pay flood insurance claims have raised concerns about the program's long-term financial solvency. Because of these concerns and NFIP's operational issues, NFIP has been on GAO's high-risk list since March 2006. As of April 2010, NFIP's debt to Treasury stood at $18.8 billion.The Subcommittee asked GAO to discuss (1) NFIP's financial challenges, (2) FEMA's operational and management challenges, and (3) actions needed to address these challenges. In preparing this statement, GAO relied on its past work on NFIP and GAO's ongoing review of FEMA's management of NFIP focused on information technology and contractor oversight issues."

"The National Flood Insurance Program (NFIP), established in 1968, provides policyholders with insurance coverage for flood damage. The Federal Emergency Management Agency (FEMA) within the Department of Homeland Security is responsible for managing NFIP. Unprecedented losses from the 2005 hurricane season and NFIP's periodic need to borrow from the U.S. Treasury to pay flood insurance claims have raised concerns about the program's long-term financial solvency. Because of these concerns and NFIP's operational issues, NFIP has been on GAO's high-risk list since March 2006. As of August 2010, NFIP's debt to Treasury stood at $18.8 billion. This testimony discusses (1) NFIP's financial challenges, (2) FEMA's operational and management challenges, and (3) actions needed to address these challenges. In preparing this statement, GAO relied on its past work on NFIP and GAO's ongoing review of FEMA's management of NFIP, particularly data management and contractor oversight issues."

National Flood Insurance Program: Continued Actions Needed to Address Financial and Operational Issues