It may be necessary to raise the National Flood Insurance Pro- gram’s (NFIP) borrowing authority to as high as $30 billion to cover claims resulting from Superstorm
Sandy, state insurance regulators fear.
However, Don Griffin, vice president,
personal lines, for the Property Casualty Insurers Association of America
and head of an industry coalition on
the Federal Emergency Management
Agency, cautions that initial estimates
are rarely accurate.
Currently, the Obama administration plans to ask Congress to raise the
National Flood Insurance Program’s
borrowing authority to $25 billion, or
$4.025 billion over its current borrow-
Need to Be
Raised to $30B
By arthur D. Postal
ing authority during the current lame-duck session, according to federal, state
and industry officials.
But, a higher cap may be necessary,
state insurance regulators concluded dur-
ing a meeting held in Mobile, Ala.in mid
November, according to Michael Chaney,
Mississippi insurance commissioner and
head of the Flood Insurance Working
Group of the National Association of In-
Chaney says current estimates by risk
modelers are that the storm could cause
$55 billion in economic losses. Chaney
President Barack Obama listens to members of his cabinet discuss updates on responses to Sandy during a
cabinet meeting held at FEMA headquarters on Oct. 31, 2012. Jocelyn Augustino/FEMA
Experts Debate Impact of Infrastructure Damage on
Insurance implications due to damage to infrastructure from Superstorm Sandy are still difficult
to estimate at this point, but most infrastructure is not privately insured.
Meyer Shields of Stifel Nicolaus
recently said insured losses from Sandy
could be higher than modelers’ estimates
once infrastructure losses are added.
Sandy’s storm surge and high winds
wreaked havoc on the New York and New
Jersey train systems. Buses were also shut
down for some time after the storm. Roads
were washed away in some places, and the
entire Northeast succumbed to massive
power outages. Not to mention damage
to municipal, state and federal buildings,
airports and harbors.