How would the multiple peril program set actuarially sound premiums?
The Multiple Peril Insurance Act does not micromanage the program but anticipates that NFIP would establish windstorm risks and set premiums in precisely the same manner as insurance companies and state-sponsored wind pools and FAIR plans. NFIP would contract for risk models and loss data in order to estimate potential losses in specific geographic locations. From that community risk profile, premiums for specific properties would be set using existing industry products that adjust for location, construction methods, foundation, wall, and roof types, and other building characteristics. The bill requires that premiums for multiple peril coverage be based on risks as determined by accepted actuarial principles. The premiums also must include administrative expenses and other operating costs. The bill instructs NFIP to establish regulations detailing the terms and conditions of the program, including risks, premiums, eligibility, and coverage. The bill also instructs NFIP to conduct studi
