Is the NFIP the reinsurer?

zporirizporiri
in Horn.Flood

I have in my notes that the NFIP is the reinsurer for Write-Your-Own Program risks. I noticed today that the wiki states "That for both types of servicing arrangements, NFIP retains the financial risk."

I am confused as to how the NFIP could both retains the risk, while also being the reinsurer. Are my notes incorrect that the NFIP is the reinsurer for Write-Your-Own Program risks?

Comments

  • Staff - ACStaff - AC

    The two are not contradictory. WYO is the arrangement whereby private companies write the flood policy, but it's like fronting, and the real risk-bearer is NFIP. NFIP acts as a reinsurer assuming all of the risk in this arrangement.

  • zporirizporiri

    Ah, OK thank you, I was not thinking of it as a fronting situation. That makes more sense to me now.

  • Staff - ACStaff - AC

    Sure, good luck.

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