The National Flood Insurance Program is seeking $5.6 billion in additional borrowing authority in order to cover claims and expenses through fiscal 2006, ending September 30.  David Maurstad, acting director and federal insurance administrator with the Federal Emergency Management Agency, also said in testimony to the Senate Banking Committee that the total cost for the 2005 hurricane season would exceed $23 billion, adding that over $22 billion of this was due to Hurricane Katrina alone.

Maurstad said the 2005 hurricane season has resulted in payments totaling more than $13.5 billion to date, nearly matching the total amount paid out over the NFIP's 37-year existence. In November, Congress had raised the program’s borrowing authority to $18.5 billion from $3.5 billion, when the program ran out of money and claims payments ceased.

Marrstad told the committee, “It is important to remember that these challenges are not the result of a broken program; rather, they are the result of the most catastrophic back-to-back hurricane seasons this nation has ever experienced.” But Committee Chairman Sen. Richard Shelby (R-Alabama) disagreed, maintaining that the NFIP is “bankrupt” and in need of a major overhaul.

NFIP Seeks $6.5 Billion Loan, Sen. Shelby Vows Overhaul (Insurance Journal 1/27/06)

February 1, 2006