FEMA Administrator Calls NFIP Finances Unsustainable
Speaking before the Senate Homeland Security Appropriations Subcommittee on July 23, Federal Emergency Management Agency (FEMA) Administrator Craig Fugate told lawmakers that while Congress had given the agency the authority to charge affordable flood insurance rates under the National Flood Insurance Program (NFIP), it did little to address the long-term financial problems of the program.
“We also have to look at sustainability. It is a vital part of the program’s success,” he said. He warned that the level of debt carried by the NFIP could devastate the program if another severe storm hits the United States, especially as Congress increased FEMA’s borrowing authority to $30 billion after Hurricane Sandy. The bulk of the hearing, however, focused on FEMA’s efforts to release updated flood insurance maps, which insurers say they need to accurately determine what rates to charge policyholders.
Fugate’s testimony was part of a hearing called by Sen. Mary Landrieu (D-La.), chairwoman of the subcommittee. In June, Landrieu introduced a bill to fund the Department of Homeland Security (DHS), which included an additional $100 million for FEMA to update and correct flawed flood maps across the country. When added to the $121 million in fees dedicated to mapping activities, the bill provides $221 million total for updating flood maps. Fugate testified July 23 that roughly half of the flood maps produced by FEMA are considered accurate.