U.S. Rep. Blaine Luetkemeyer (MO-03) issued the following statement following the announcement from the Federal Emergency Management Agency (FEMA) regarding reinsurance:

“Over the last few months we’ve seen communities along the Gulf Coast and across the country come together to support the people devastated by hurricanes and tropical storms. We continue to hold each person who has lost so much in our thoughts and prayers while we take pride in the bravery and selflessness of our first responders and folks from every corner of the U.S. including Missouri.

As the victims continue rebuilding their homes we are reminded of the importance of stable and reliable flood insurance. Without it some families may never be able to return to a sense of normalcy. We cannot overlook the role reinsurance and the capital markets play in ensuring taxpayers are protected against losses from National Flood Insurance Program (NFIP). For several years I’ve pressed FEMA to engage in the purchase of reinsurance or capital markets alternatives. In April, I introduced the Taxpayer Exposure Mitigation Act, legislation that would require FEMA to do so. Fortunately, earlier this year, FEMA did purchase some reinsurance to cover potential losses. That reinsurance coverage will do just what it is designed to do: transfer risk from the taxpayer to the private sector. The result is taxpayers potentially saving up to $1 billion in costs associated with Hurricane Harvey flood insurance payments. 

While this is positive news and a good start, FEMA could have saved taxpayers billions of dollars more had it transferred a larger portion of its risk to the private sector, which it has the authority to do. Greater involvement from the private sector, specifically the reinsurance and capital markets, in flood insurance would provide greater options for consumers and protections for taxpayers. The families who are recovering from hurricane season, just like those who have recovered from horrific storms in the past, deserve a system that works for them, not against them. While we support the fact that FEMA is going to renew their reinsurance coverage in 2018, it still is not enough to cover their potential costs and taxpayer’s exposure.”