Allowing scheduled National Flood Insurance Program rate increases to move forward would be "a critical first step" toward attracting private insurers to the flood-insurance market, says the Government Accountability Office.
In a January report, the GAO says stakeholders it interviewed indicated "full-risk NFIP rates would encourage private-sector involvement because they would be much closer to the rates private insurers would need to charge."
Conversely, delaying or repealing the rate increases "may reinforce private insurers' skepticism that they would ever be permitted to charge adequate rates and make their participation unlikely in the foreseeable future," according to the report.
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