NFIP Reinsurance Program Update for 2017

FEMA’s National Flood Insurance Program (NFIP) has experienced many large flood disasters over its history, particularly in 2005, 2008, and 2012. As a result of these flood disasters, flood insurance claims have far exceeded the amount of funds available to pay them, resulting in a $23 billion debt to the U.S. Treasury.


Through the Biggert-Waters Flood Insurance Reform Act of 2012 (BW-12) and the Homeowners Flood Insurance Affordability Act of 2014 (HFIAA). FEMA received the authority to secure reinsurance from the private reinsurance and capital markets. In response, FEMA created the NFIP Reinsurance Program to be financially prepared for potential losses from significant flooding events similar to Hurricanes Katrina and Sandy.


In January 2017, FEMA expanded its initial September 2016 reinsurance placement and transferred $1.042 billion of the NFIP’s financial risk to 25 reinsurers through January 1, 2018. Under the agreement, reinsurers agreed to indemnify FEMA for flood claims on an occurrence basis. FEMA contracted with Guy Carpenter and Company a subsidiary of Marsh & McLennan Companies, to provide broker services to assist in securing the reinsurance placements.


For more information about the Reinsurance Program, visit


Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s