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”