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GAO wants improvements in flood insurance programs
WASHINGTON (1/28/10)--The Government Accountability Office (GAO) has called for improvements to the National Flood Insurance Program. The GAO “reviewed and analyzed Federal Emergency Management Administration (FEMA) / National Flood Insurance Program (NFIP) guidance, data, and financial reports,” as well as prior audit reports, and also interviewed “FEMA officials and contractors.” Citing its recently completed study of the effectiveness of “controls in place during the 2005 to 2007 time frame,” the GAO said that “three key structures” that are used by FEMA to oversee the NFIP and related “financial activity” could be improved. Specifically, FEMA’s reviews of “the results of state insurance department audits related to flood insurance activity,” its “triennial operational reviews” of Write Your Own (WYO) insurance companies, and its claims reinspection program sampling procedures still need improvement. The GAO previously identified all three areas as needing improvement. The GAO suggested that FEMA streamline some of its own procedures and bring in outside independent sources to improve some of its auditing processes. The Credit Union National Association has repeatedly said that adequate funding for the NFIP is important to ensure that people living in flood plains are able to secure protection, obtain mandatory coverage, for their homes and mortgages. Flood insurance is often required by law in certain areas and thus becomes a necessary purchase by prospective homeowners before credit unions can offer mortgages and other related products to homebuyers in flood prone areas. For the full GAO release, use the resource link.
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