Sept 22, 2016 – FEMA Launches New Reinsurance Initiative

Sept 22, 2016 – FEMA Launches New Reinsurance Initiative


Due to large scale flood disasters, the cost of flood insurance policy claims has far exceeded the amount of premiums and fees received. As a result, the National Flood Insurance Program (NFIP) has incurred major debt to the U.S. Treasury. Today, the Federal Emergency Management Agency (FEMA) announces an initiative to more actively manage its financial risk.


Historically, FEMA was limited to flood insurance premiums and the specific borrowing capacity from the U.S Treasury to pay flood insurance claims, with no additional financial tools to manage the consequences of the NFIP’s flood risk.


Through the Biggert-Waters Flood Insurance Reform Act of 2012 and the Homeowner Flood Insurance Affordability Act of 2014 (HFIAA 2014), FEMA received the authority to secure reinsurance from the private reinsurance and capital markets.


In response to the authority granted by Congress, FEMA created a NFIP Reinsurance Program with the primary objective to enable the Federal Insurance and Mitigation Administration (FIMA) to diversify the tools it uses to manage the financial consequences of its catastrophic flood risk.


To successfully implement a high quality reinsurance program at the federal level starting in early January 2017, the NFIP Reinsurance Initiative Team is taking measured steps to identify and resolve any barriers or issues in advance of the implementation.  The FEMA 2016 Reinsurance Initiative starts by acquiring $1 million in reinsurance to prepare for a larger purchase early next year.


For more information about changes to the NFIP Reinsurance, visit: