OIR Seeking National Flood Insurance Ratemaking Data
Insurance Commissioner Kevin McCarty has requested that the Federal Emergency Management Agency (FEMA) provide data relating to how the National Flood Insurance Program (NFIP) sets rates. McCarty has commented that even without seeing the data, it appears that the NFIP’s rates would not satisfy the Office of Insurance Regulation’s standard that rates not be unfairly discriminatory. However, McCarty notes that the OIR is unable to assess whether the NFIP’s rates are excessive or inadequate without further data.
Questions about the NFIP’s rates have surfaced again in Florida in recent weeks. Policymakers have questioned the need for and merits of potential rate increases in the flood insurance program. Commissioner McCarty points out that over the period 1978-2012 the Florida loss ratio for the flood program was 28.3%. McCarty has indicated this loss ratio is “not alarming” and does not justify dramatic increases in flood insurance rates.
In an October 2, 2015, letter to FEMA Administrator Craig Fugate, Commissioner McCarty asked for all data used by the NFIP in setting rates, both on an aggregate basis and a Florida-only basis. the OIR also seeks support for the rating factors and expenses underlying the flood program rates.