Coal Mine Subsidence

Several States May Not Meet Federal Insurance Program Objectives Gao ID: RCED-91-140 May 28, 1991

Pursuant to a congressional request, GAO examined: (1) the Department of the Interior's Office of Surface Mining Reclamation and Enforcement's (OSMRE) efforts to implement the federally assisted coal mine subsidence insurance program; and (2) six states' efforts to develop self-sustaining insurance programs.

GAO found that: (1) after 5 years experience with the program, two of the six states that received grants may not be progressing toward self-sustainability; (2) state officials noted that their participation rates were too low to generate sufficient premium income to meet the insurance reserve requirement for anticipated claims; (3) state officials also noted that low participation rates greatly increased the risk that a major subsidence event would threaten solvency; (4) OSMRE lacked effective management of federal grants and did not provide the oversight necessary to ensure that program objectives were met; and (5) OSMRE cited the limited funds involved and the resources needed to actively participate in state-administered programs as the reason for its passive grants management.

Recommendations

Our recommendations from this work are listed below with a Contact for more information. Status will change from "In process" to "Open," "Closed - implemented," or "Closed - not implemented" based on our follow up work.

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