US House panel contemplates private insurance to help control NFIP costs
“Shifting flood insurance to the private sector would mean bringing powerful catastrophe models to bear to create more accurately priced property values and risks,” said R.J. Lehmann, senior fellow with the R Street Institute. “It would mean having companies compete to fashion products that are more attractive to policyholders and that better meet their needs.”
Lehmann testified at a June 7 House Financial Services Committee hearing that is considering six pieces of legislation that will form a measure to reauthorize the NFIP. The program expires Sept. 30
…Not so, said Lehmann.
“There is a concern that a more active private market would destabilize the NFIP by allowing private insurers to cherry-pick low-risk policies,” he said. “The program already serves as a high-risk pool. There are, by and large, no cherries to pick.”