Help

BI’s Article search uses Boolean search capabilities. If you are not familiar with these principles, here are some quick tips.

To search specifically for more than one word, put the search term in quotation marks. For example, “workers compensation”. This will limit your search to that combination of words.

To search for a combination of terms, use quotations and the & symbol. For example, “hurricane” & “loss”.

Login Register Subscribe

FEMA puts call out for 2018 NFIP reinsurance bids

Reprints
FEMA puts call out for 2018 NFIP reinsurance bids

The Federal Emergency Management Agency has launched a procurement process to secure reinsurance for the National Flood Insurance Program, effective on or about Jan. 1, 2018.

FEMA piloted a reinsurance program for 2016 and secured a new placement effective Jan. 1, 2017, through Jan. 1, 2018, through a consortium of 25 reinsurers arranged through Guy Carpenter & Co. L.L.C.

Under the agreement, the reinsurers indemnified FEMA for flood claims on an occurrence basis. The layer is structured to cover 26% of losses between $4 billion and $8 billion. A combined total of $1 billion of the NFIP’s flood risk was transferred to the private reinsurance market through this agreement.

FEMA was expected to tap the reinsurance layer to deal with claims losses caused by hurricanes Harvey, Irma and Maria.

“FEMA’s 2017 reinsurance placement is triggered when the total losses for a single event exceed $4 billion,” a spokesperson said in an emailed statement. “Based on modeling, FEMA believes that the large losses associated with Hurricane Harvey will allow FEMA to file reinsurance claims. At this time, there is not a firm date on when reinsurance will be triggered to pay premiums.”

Final tenders for the next one-year reinsurance agreement, which will again be brokered by Guy Carpenter, are due by Dec 15.

 

Read Next

  • FEMA’s reinsurance pilot program offers public-private example

    Legislative proposals to reform the National Flood Insurance Program explicitly support the use of risk transfer tools, which private-market stakeholders say is critical to expanding their participation in covering flood risk and ensuring there is not a repeat of 2005, when losses related to several major hurricanes helped put the program in debt to the tune of $24.6 billion.