FEMA May Seek Flood Insurance Bailout
The Federal Emergency Management Agency (FEMA) is likely to request a congressional bailout for the National Flood Insurance Program (NFIP) as losses from Hurricane Sandy are expected to be between $6 billion and $12 billion, more than its current borrowing capacity of $2.9 billion.
NFIP still owes taxpayers about $18 billion from Hurricane Katrina losses in 2005. While Congress passed a package of NFIP reforms to improve the program’s finances, those changes are unlikely to have an impact for several years.
Edward Connor, FEMA’s deputy associate administrator for federal insurance, said he expects the Homeland Security Department to seek an expansion of NFIP’s $20.7 billion borrowing cap from Congress.