Slabbed takes at peek at NFIP direct and explains the timing of State Farm's departure from the Flood Program

This J&A approval request does not diminish the fact; that FEMA Acquisitions allowed this contract to be performed without adequate oversight from our acquisition staff whether inherited or created. As an organization we are taking full ownership of our responsibility to manage the contract properly and are taking the necessary steps to correct our process.

Welcome to Government, Inc., NFIP style, as FEMA issued a justification and approval to extend the contract with NFIP’s Direct Servicing Agent, Computer Science Corporation on April 30, 2010. We’ve profiled the problems in the National Flood Insurance Program since early 2008 and believe me when I say the above disclosure takes FEMA light years away from the federal agency and program long known for its coziness with the WYO insurers it was charged to regulate during the George Bush years.

FEMA has a problem though as we continue quoting from the justification and approval:

The NFIP-Direct is the only option for independent Agents (as opposed to “captive agents” who write through their companies such as State Farm, Nationwide, Traveler’s, etc.). The Direct via Independent Agents have historically written about 10% of the total Continue reading “Slabbed takes at peek at NFIP direct and explains the timing of State Farm's departure from the Flood Program”

The Mobile Press Register tackles NFIP reform: The Slabbed are the fly in the ointment that just won’t go away

Hat tip to both a reader and Editilla over at the Ladder. While we understand why a reporter has to hang his hat on that fatally flawed OIG report on claims dumping I am certain it will not be the last word on the subject, far from it in fact. After reading this article my mind is open to the possibility it may be better to disband FEMA and start anew with an agency that is not  so keen on flushing massive amounts of taxpayer money down the toilet. Now for Sean Reilly’s article which appeared in yesterday’s Press Register:

When lawmakers ponder the woes of the federal flood insurance program, they tend to dwell on the billions of dollars in red ink spilled since 2005, when Hurricane Katrina left a backwash of huge losses.

Less attention has been given to the program’s dependence on private insurance companies and agents to do most of the actual work of selling policies and adjusting claims.

As the Press-Register has reported, those companies — which include industry heavyweights such as State Farm and Nationwide — and agents were paid more than $750 million for their services in fiscal 2008, almost a quarter of total premium payments.

This amounts to a sweetheart deal, according to some critics. Their position was boosted last fall by a congressional finding that a half-dozen insurers had received more than $300 million in flood-insurance program overpayments during three years. In one case, a company earned a marketing bonus despite having done no marketing.

“There’s just almost no oversight, really,” said Brian Martin, policy director for Mississippi Rep. Gene Taylor, D-Bay St. Louis, who has frequently called into question the insurance companies’ role in the federal program. Continue reading “The Mobile Press Register tackles NFIP reform: The Slabbed are the fly in the ointment that just won’t go away”