Saturday, March 12, 2011

Follow-up To NFIP Hearing

The NFIP was unusally substantive but without many answers. Almost no discussion of mapping issues except that maps need to be accurate. What is fascinating is that the day before Craig Fugate issued a decision on crediting levees that I believe is Ultra Vires, meaning he had no authority to issue such a decision. It directly undermines the whole philosophy of the hearing which was focused on fiscal solvency of the NFIP.

The hearing record is open for 30 days while Members questions are answered for the record. Many of those questions appear substantive.

One note is that it looks like a heavy year for spring runoff and the New York City area and New England is already experiencing heavy flooding.

I thought the ASFPM witness did a good job but she also apparently earns her living off of the NFIP as did several other members of the panels, although some may well be de minimus and of course Frank Nutter of the RAA [Reinsurance Association of America] does not since no portion of the NFIP risk portfolio is laid off with reinsurance coverage, a strategy that is already legal IMO. The international reinsurance capacity however looks like it will be heavily compromised due to flooding and earthquakes for at least the next several years so doubtful that strategy will be utilized by the NFIP in next few years.

Craig Fugate scheduled to testify did not due to the Japanese events.