2/3 of flood insurance premiums go to private insurers!
As Congress considers what do about sharply inflated flood insurance premiums as a result of the 2012 Biggert-Waters Act, it might want to revisit a 2009 report by the Government Accountability Office.
- The report said two-thirds of the premiums collected by the program in the previous three years went to private insurance companies who administer the policies. It left no doubt that oversight of the payment for insurance company services should be made cost-efficient.
- The report found that FEMA doesn't enforce audit requirements of the private companies that participate in the program and has no system for reviewing the information it does collect. It suggested that FEMA has no idea what it actually costs private companies to run the program, and uses an outdated standard in determining how much it pays them.
- Add to that their stalling and underpayment of claims from Sandy victims and you see another big problem with the Biggert-Waters Act that Congress must un-do!