Subj: NFIP Questions and FEMA responses from Rep. Gregory Meeks Office

Good morning:

Below, please find several questions (along with FEMA’s response) that were presented to the office of Congressman Gregory Meeks.  Please feel free to share with members of your listserv.

Q: How is the NFIP deficit calculated?

FEMA Response:

The NFIP deficit (or surplus) is not calculated, it is accrued. The statute establishes that our premiums and fees may only be used for specific uses, including payment of losses, mapping, mitigation, and program expenses.

More specifically, the deficit or surplus is:

+ Premiums

+ Fees

+ Other income (such as appropriations)

– Losses

– Loss related expenses

– WYO expenses

– Mapping Expenses

– Certain mitigation activities established by statute

– Other operating expenses as allowed by statue

Q: What accounts for the $31B negative swing (Note: $6B more in premiums have been collected than have been paid out).

FEMA Response:

Attached is a summary of FEMA’s financial statements. The $6B figure was not produced by FEMA.

Q: 40% of federally backed mortgages that are required to have  flood insurance do not. Why is this not enforced?

FEMA Response:

FEMA does not enforce the mandatory purchase requirement, lenders do. Biggert-Waters increased the penalty on lenders for not enforcing the mandatory purchase; as a result, enforcement may enhance in the future.

Q: The FEMA/NFIP rate sheets are no longer public, when will new rate tables be released to the public?

FEMA Response:

FEMA’s rates have been released publicly.

Most policyholders are rated using these tables:

http://www.fema.gov/flood-insurance-manual

Prior to BW-12, Full-risk rates for structures below the Base Flood only applied to policyholders who built in violation of local ordinances. Now that other policyholders, such as some pre-FIRM subsidized policyholders who lose their subsidy, will be rated using these rates, we have made them public as well here:

http://www.fema.gov/media-library/assets/documents/34620

Q: What portion of flood premiums actually goes to coverage?

FEMA Response:

Roughly 60% of premium and policy fee collected is available for losses and loss related expenses. 40% is for programmatic expenses such as mapping and mitigation, administrative expenses of the Write Your Own partner companies, NFIP expenses, agent commissions, and State premium taxes.

Warmest regards,

Joseph

Joseph N. Edwards
Community Liaison
Office of Congressman Gregory W. Meeks (NY-5)
6712 Rockaway Beach Boulevard
Arverne, New York 11692
347.230.4032 - Office
347.230.4045 - Fax
Joseph.Edwards@mail.house.gov

www.house.gov/meeks