Letter to Craig Fugate, Administrator of the Federal Emergency Management Agency - Calling for Immediate Investigation Into Whether Long Island Homeowners Are Being Treated Fairly & Without Bias

Letter

Dear Administrator Fugate,

We are deeply concerned and outraged by evidence that has recently come to light, which demonstrates that an engineering company, working with a "Write Your Own" (WYO) insurance company, may have modified engineer's reports in a deliberate attempt to deny money to Long Islanders whose homes were damaged as a result of Superstorm Sandy. According to an order issued on November 7, 2014, by U.S. Magistrate Judge Gary Brown in the Eastern District of New York, the evidence reveals "reprehensible gamesmanship by a professional engineering company that unjustly frustrated efforts by two homeowners to get fair consideration of their claims. Worse yet, evidence suggests that these unprincipled practices may be widespread." This is completely unacceptable and must be addressed by FEMA immediately. We are also very concerned about the delay tactics used by WYOs to when litigating sandy claims, which may end up costing the federal government millions of dollars in legal fees for the attorneys hired by the insurance companies.

On multiple occasions, we have communicated to you and your staff our significant concerns with practices used by the WYOs, and have requested an investigation into the matter. To date, we have not received any indication that would lead us to believe that these matters are being fully investigated. Therefore, we renew our request for a full and open investigation into the WYO program and FEMA's oversight of it, which should include, at a minimum,

-the nature of the "peer review" process used by engineering firms hired by WYOs, the extent to which other reports were changed in a way that materially altered the findings and conclusions of the engineer who inspected the property on site, and whether such changes were ever disclosed to homeowners;

-whether there is sufficient FEMA oversight over the WYO program and the WYO's hired legal counsel to guard against these types of unscrupulous practices;

-the litigation practices used by WYO companies to defend claims; and

-whether there are perverse incentives in the NFIP program for WYO carriers to seek to reduce the amount of money paid to policyholders who file legitimate claims.

In carrying out this investigation, we also request that you provide our offices with a timeline for when the investigation will be complete, as well as a report to Congress on its findings and the corrective actions that FEMA will take to improve transparency and consumer protections for all policyholders. If, as the evidence suggests, wrongdoing was committed by the WYO carriers, or anyone hired by a WYO carrier to assist with their administration of NFIP policies or any litigation related to NFIP claims, there must be severe consequences.

Every New Yorker who participates in the NFIP must have the assurances that they are being treated fairly by this program. That can only happen once a full investigation is complete and there is the strongest possible oversight over every step of the claims process. We urge you to make this investigation a top priority and look forward to your prompt reply.

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