FEMA Seeks 3rd NFIP Cat Bond
A $300 million catastrophe bond is poised to be the third sought by the Federal Emergency Management Agency (FEMA) for the National Flood Insurance Program (NFIP), according to sources. The NFIP would get at least $1.1 billion in reinsurance coverage through the successful issuance of the bond. FEMA’s previous cat bonds were for $500 million and $300 million.
The coverage FEMA is seeking will reportedly provide reinsurance protection for major flood loss events emanating from named storms, so tropical depressions, storms and hurricanes. The coverage will be across the entire United States, Puerto Rico, U.S. Virgin Islands and D.C. and the deal will provide flood reinsurance to the NFIP across a three-year term.