NCJ Number
83734
Date Published
1982
Length
15 pages
Annotation
The nature, operations, and financial state of the Federal Crime Insurance Program (FCIP) are reviewed to aid legislators in their deliberations on the reauthorization of the FCIP.
Abstract
The FCIP was created by Title VI of the Housing and Urban Development Act of 1970 and started in August 1971. Under the program, insurance for burglary, robbery, theft, and similar crimes is available to residential and commercial property owners in States where the private market or statewide programs do not make crime insurance available or where they make it prohibitively expensive. The program is administered by the Federal Insurance Administration of the Federal Emergency Management Agency (FEMA). Legislative authorization to enter into new insurance policies ends on September 30, 1982. The administration has recommended the program's termination. As of September 30, 1981, 26 States, the District of Columbia, Puerto Rico, and the Virgin Islands have participated in the program, bringing the number of policies in force to 72,782 (51,472 residential policies and 21,310 commercial policies). For the 12 months ending September 30, 1981, the program lost $33.7 million, and from August 1971 through September 30, 1981, $138 million was lost. Because of a unique funding method, FCIP has never received an appropriation. The program has been funded by the National Insurance Development Fund. Within the last year, through a premium increase and a revision of underwriting and claims adjusting practices, FEMA has sought to reduce program losses and potential program abuses. The need for the FCIP may be significant in only a few States, since 71 percent of the policies are in New York, Pennsylvania, and Florida. In some States, alternatives to FCIP exist. (Author summary modified)