AIA Sees Eye-to-Eye with GAO Study on Impact of Adding Wind Coverage to NFIP
Gov. Marc Racicot, president of the American Insurance Association (AIA), today issued a statement regarding the findings of a Government Accountability Office (GAO) study which found that adding wind coverage to the National Flood Insurance Program (NFIP) would be challenging. Following is his statement:
“We agree with the GAO’s findings that dramatically expanding the NFIP to include wind coverage poses significant operational challenges for the program. These include, but are not limited to the potential for huge deficits that all taxpayers would ultimately be responsible for – this on top of the current NFIP debt of about $17 billion.”
“As the U.S. Senate prepares to debate NFIP legislation, we urge lawmakers to strongly consider the GAO findings, particularly given that there is adequate wind coverage capacity in every state through either the traditional private market, or state residual markets backed by private insurers. These mechanisms do not place the burden of deficits on all American taxpayers.”
“Adding wind coverage to the federal flood insurance program would be a fundamental realignment of both the NFIP and the private wind insurance market. We continue to believe the solution rests in improving, not displacing, the private sector's ability to serve homeowners and businesses in the path of potential storms.”
About AIA
The American Insurance Association represents approximately 350 major insurance companies that provide all lines of property and casualty insurance and write more than $123 billion annually in premiums. The association is headquartered in Washington, D.C. and has representatives in every state.
Source: Sourc:e: AIA Press Release | Published on May 7, 2008
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