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The Federal Emergency Management Agency on Tuesday said it has secured reinsurance for the National Flood Insurance Program effective Jan. 1, 2017, through Jan. 1, 2018, through a consortium of 25 reinsurers.
Under the program, which was arranged through Guy Carpenter & Co. L.L.C., reinsurers agreed to indemnify FEMA for flood claims on an occurrence basis, FEMA said in its statement.
The layer is structured to cover 26% of losses between $4 billion and $8 billion. A combined total of $1.042 billion of the NFIP’s flood risk was transferred to the private reinsurance market through this agreement, FEMA said.
Spokesmen for FEMA and Guy Carpenter could not immediately provide further details on the reinsurers involved.
FEMA received authority to secure reinsurance through the Biggert-Waters Flood Insurance Reform Act of 2012 and the Homeowner Flood Insurance Affordability Act of 2014, FEMA said in its statement. It said the 2017 reinsurance placement is an expansion of a smaller placement made by FEMA in September 2016.
“Securing reinsurance through the NFIP Reinsurance Program is a key step towards achieving the NFIP’s long-term vision of building a stronger financial framework,” said FEMA Deputy Associate Administrator Roy Wright in the statement. “This reinsurance agreement places the NFIP in a better position to manage losses incurred from major events like (Superstorm) Sandy.”