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How are the National Flood Insurance Program (NFIP) payments caused by natural disasters such as Hurricane Katrina treated in the NIPAs?
In the case of Hurricane Katrina, substantial damage due to flooding occurred, particularly in New Orleans. Many of the affected properties were covered by the National Flood Insurance Program (NFIP) which is classified as a government enterprise in the NIPAs. The benefit payments that will be made by NFIP in response to flood damage claims will be netted against insurance benefits that governments receive from business (that is, the NFIP payments will be shown as negative transfer receipts from business).
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