Flood

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BattleTable

Based on past exams, the main things you need to know (in rough order of importance) are:

• funding for NFIP including mechanisms & concerns about sustainability
• Biggert-Waters flood insurance reform act of 2012

The Horn & Brown reading on the National Flood Insurance Program (NFIP) was new to the syllabus for 2018.Fall. It is dated September 12, 2017. The previous NFIP reading was dated February 6, 2013 and although many components of NFIP are

reference	part (a)	part (b)	part (c)	part (d)
E (2017.Fall #8)	funding: - concerns regarding NFIP	participation rate: - why it's low for NFIP	participation rate: - how to increase	wind coverage under NFIP: - arguments for & against
E (2017.Spring#8)	risk transfer process: - crop & flood insurance1	risk transfer process: - criticisms
E (2016.Fall #9)	NFIP challeneges: - sustainability, assessment	flood plain development: - ways to reduce
E (2016.Spring#9)	uninsurability: - of flood risk	functions: - NFIP	Biggert-Waters: - provisions
E (2015.Fall #8)	funding: - NFIP	Biggert-Waters: - NFIP premium subsidies	Biggert-Waters: - NFIP participation rate
E (2015.Spring#9)	see Germani.GovtIns - [Hint: FCC(ES)	statutory mandate: - NFIP	moral hazard: - impact on NFIP	adverse selection: - impact on NFIP
E (2014.Fall #9)	funding: - NFIPN	funding: - social security	funding: - shortfall for NFIP
E (2013.Fall #13)	ratemaking principles: - satisfied by NFIP?	improvements: - to NFIP

¹ See Germani.GovtIns for the crop insurance part of this question.

^N Part (a.i) on social security is no longer on the syllabus.

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In Plain English!

Intro

Don't bother reading the Summary from the Horn reading. It's confusing. Here's what it covers:

paragraph 1 (general info)

• purpose of NFIP (flood insurance & mitigation)
• participation in NFIP is voluntary

paragraph 2 (flood maps)

• FEMA makes FIRMs (FIRMs = Flood Insurance Risk Maps)
• FIRMs identify SFHAs (SFHAs = Special Flood Hazard Areas)

paragraph 3 (policies)

• there are 3 types of SFIPs (Standard Flood Insurance Policies)
• property owners is SFHAs must buy flood insurance
• property owners in moderate risk areas may buy PRPs (Preferred Risk Policies) that are cheaper

paragraph 4 (premiums)

• should reflect true costs but some subsidies are available

paragraph 5 (suspension from NFIP)

• probation or suspension from NFIP makes it hard to get disaster relief

paragraph 6 (NFIP funding)

• funded by congressional appropriations and premiums
• NFIP owes treasury $25b (serviced by NFIP, not taxpayers)
• repayment schedule is uncertain (NFIP may not be sustainable)

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BattleCodes

Memorize:

Conceptual:

Calculational: