The National Flood Insurance Program (NFIP)will likely need to go to Congress for additional borrowingauthority to pay claims from Superstorm Sandy, according to twogovernment watchdog organizations.
“It appears likely that Sandy will exhaust the NFIP's remaining$3 billion of statutory borrowing authority, meaning it will needto request more money from Congress to pay its claims,” R.J.Lehmann, a senior fellow at the R Street Institute (a Washingtonthink tank), says in a statement.
“In the short term, we would insist the NFIP use its existingauthority to raise rates, buy reinsurance and issue catastrophebonds, so that the private market, rather than taxpayers, assumesthe risk of these sorts of catastrophes in the future,” he adds.“Over the longer term, further NFIP reform must include phasing inactuarial rates for all policies and possibly selling some of theNFIP's 5.6 million policies to private insurers.”
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