Although Risk Rating 2.0, the updated rate-setting method for the National Flood Insurance Program (NFIP), better aligns the program's premiums with the flood risk of individual properties, it still fails to achieve actuarial sound rates, according to a report from the Government Accountability Office (GAO).
The NFIP has long been plagued by rate inadequacy, with a report from Poulton Associates, LLC and HazardHub finding that the program's premiums fell 9% from 2014-2019, despite Congress mandating 5% annual increases.
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