The NFIP is now one of the largest property and casualty insurers in the Nation. At the core of the program is a bargain struck between communities and the Federal Government. Communities voluntarily join the NFIP to make their citizens eligible to purchase insurance. Over 19,000 communities nationwide and 973 communities in Texas participate. Communities agree to adopt and enforce a floodplain management ordinance to regulate new development in flood hazard areas.
Enforcement is key.
No taxpayer dollars are used. The premiums we collect from policyholders go into a Flood Insurance Fund, which, in turn, is used to cover insurance losses and other expenses. A common myth that you hear in the press is that the NFIP is bankrupt. The program is operating as designed. As the Federal Insurance Administrator, first and foremost, I am responsible for ensuring that the Fund is in sound financial shape, and used in the best interests of our policyholders.