Insurance Networking

[> william.kenealy]

What would you do to fix the National Flood Insurance Program?

[> RDK]

Unlayer it. It used to be under FEMA. Now it's still under FEMA, which itself is now under Homeland Security. Three layers! Make NFIP a stand-alone entity, so that the funds which fuel it are not tied to any other agency nor funding source.
Make it less bureaucratic. Simplify. Then, raise the limits above the current $250,000 maximum per dwelling, and above the current $100,000 for personal property/contents. It also needs to raise the separate structures and loss of use / additional living expenses coverages.

[> Flood]

Implement actuarial, sound rates, require carriers to keep a piece of the underwriting risk, then enable carriers to impact the rates based on their underwriting history. Short of that, implement actuarial rates and then let the politicians publicly decide how much the taxpayers are going to subsidize premiums.

Only pay ULAE in the month in which a loss is paid to restrict gaming the system by setting reserves at inflated dollar amounts and adjusting them when the loss is paid.

Debt forgiveness. The program worked the way it was supposed to post-Katrina. It is not structured as an insurance program, but as a funded social program. Pick a side in that fight and administer it appropriately.

Long term authorization. The public is tired of kick the can. Authorize it for stability and make intelligent improvements as we move forward.

[> sethm]

Another thing that must be done is to assess higher premiums for vacation homes and second home. Today, NFIP charges the same rates for vacation homes and owner-occupied structures. This must be changed to avoid losses. Subsidy for older structures must also be eliminated.