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93 93 INVESTMENT GOVERNMENT PROPERTY PRESERVATION Journal of building a culture of preparedness across the nation, with 40 years of experience in disaster resilience and the insurance industry. As Senior Executive of the NFIP, he led the largest single-peril insurance operation in the world providing more than $1.3 trillion in flood coverage to more than five million U.S. policyholders. During his tenure with FEMA, Maurstad has held leadership positions for hundreds of disaster operations, including Hurricanes Katrina, Matthew, Irma, Maria and Michael, tropical storm Harvey and countless catastrophic flooding and wildfire events. David's expertise in disaster recovery and strategic risk management stems from extensive experience in local government as a Nebraska mayor, state Senator, and Lieutenant Governor. During his testimony, Maurstad outlined four major areas that reflect the administration's priorities for multiyear NFIP reauthorization: Ensure that more Americans are covered by flood insurance by making insurance more affordable to low- and moderate-income policyholders. "Under the current law, FEMA does not have the authority to establish and charge premiums based on a policyholder's ability to pay," Maurstad said. "Although the NFIP offers mandatory discounts and cross- subsidies based on factors unrelated to risk, those discounts and subsidies do not take into consideration the policyholder's financial need and, in fact, can make risk communication difficult because people may equate lower cost with lower risk." Communicating risk in real-time and providing Americans with tools to manage flood risk. Maurstad stressed the role technology plays in the flood risk space and basic education on flood risk for prospective homebuyers. "Where it can rain it can flood and raising awareness of true flood risk enables people to make informed decisions about their family and property," Maurstad stated. "Home buyers and renters may lack awareness about flood risk when they complete real estate transactions. Reforms that would require states to establish minimum flood-risk reporting requirements for sellers and lessors before residential transactions close would address this challenge. As climate change continues to make disasters more frequent and intense, it is vital that we provide people with the tools they need to protect themselves financially as well as physically." Reducing risk by addressing extreme repetitive loss properties. Maurstad noted that since 1978, nearly 100,000 structures have had two or more paid losses, while nearly 1,000 have suffered 10 or more losses. "e NFIP must have better tools to address insured structures that have experienced multiple flood claims," said Maurstad in his testimony. "ese repetitive loss and severe repetitive loss properties are responsible for a disproportionate share of overall losses and have a high risk of future flooding. About 2.5% of insured properties are considered unmitigated repetitive loss properties. Continuing to cover these types of structures without question contributes to the NFIP's financial challenges and can increase the risk that families living in those structures will face threats to their lives, health, and safety." Instituting a sound and transparent financial framework that allows the NFIP to balance affordability and fiscal soundness. Congress has authorized FEMA to borrow from the U.S. Treasury up to $30 billion to pay claims. e NFIP currently carries $20.5 billion in debt to the U.S. Treasury and pays approximately $400 million in interest expenses annually. "is means we are using the current premiums to pay for past claims," Maurstad explained. "As currently structured, the program is unable to pay this debt back in full. Canceling the NFIP's debt provides the program with a solid foundation that can support financial reforms around borrowing authorities, future interest, enhanced liquidity, and an "upper limit" for the size of an NFIP event. ese reforms address fundamental structural challenges and are essential to building a viable NFIP. "e NFIP combats the overall threat of flooding through four related components: Flood insurance; floodplain management; floodplain mapping; and mitigation," said Sen. Brown in calling for more to be done for those in high-risk areas. "e Bipartisan Infrastructure Bill offers a down payment on new opportunities for communities to help homeowners stay out of harm's way. But we need to do more. Infrastructure investment was a good start. But because of climate deniers in the Senate and our collective failure to fight climate change, that investment in the infrastructure bill will not be enough." @DSNEWSDAILY DS NEWS @DSNEWSDAILY FOLLOW. LIKE. RETWEET. REPEAT. Engage with DS News on social media to put the latest default servicing news, content, and strategies at your fingertips.

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