Senate OKs bill on flood insurance

The U.S. Senate passed legislation this week to require wide-ranging reforms of the National Flood Insurance Program, which received thousands of policyholder complaints in the wake of Tropical Storm Isabel.

The legislation comes amid the largest re-evaluation of claims in the history of the NFIP and the resignation of the agency's reform-minded director.


It would require better education for flood insurance agents and adjusters, a review of adjuster compensation and a codified appeals process for flood settlements. It must now be reconciled with a bill passed in the House of Representatives in December.

The unanimous support from the Senate indicates that a top-to-bottom review of the embattled NFIP will likely continue, despite the abrupt resignation this month of the agency's director, Anthony S. Lowe.


"It seems Congress has done a better job cleaning up after Hurricane Isabel than the NFIP," said Baltimore County Executive James T. Smith Jr., who has been heavily involved in efforts to secure additional aid for victims. "It's a terrific step forward, but it's really incumbent on the NFIP to follow through on the commitments that were made to the victims of Isabel." There were 6,100 claims from Maryland.

The bill also calls for the General Accounting Office, the investigative arm of Congress, to submit a report within a year on whether the coverage under the flood program is sufficient to restore policyholders to their pre-disaster state. The report also would examine the practices of the NFIP and insurance adjusters in estimating losses after the flood.

The reforms closely follow suggestions made by former Maryland Insurance Commissioner Steven B. Larsen, his successor, Alfred W. Redmer Jr., and Maryland Sen. Barbara A. Mikulski. Lowe, before he resigned, said the proposals were "consistent with the direction we're moving in generally."

Senators from Maryland and North Carolina demanded this spring a comprehensive review of Isabel claims.

NFIP spokesman James McIntyre said in an e-mail yesterday that the agency has received 1,678 review requests, of which it has completed 604. In about a quarter of those cases, reviewers have found that policyholders were owed more money, on average more than $8,000 each.

"With little more than 36 [percent] of the claims reviewed, the National Flood Insurance Program has no reason to question the integrity of the process," McIntyre wrote.

Jesse Jacobs, a spokesman for Maryland Sen. Paul S. Sarbanes, said the senator's staff has worked on 56 complaints from constituents about the flood settlements. Eight of them have been settled to the victims' satisfaction, he said. Mikulski's office is also working with more than 50 families, said her spokeswoman, Amy E. Hagovsky.

Others are seeking help from Steve Kanstoroom, a flood victim and advocate from Talbot County who has worked closely with NFIP officials.


Some flood victims have complained that their requests for re-evaluation have been lost by subcontractors who are handling the reviews or that their claims are being handled in the same way that led to flawed settlements after the storm.

This spring, Debra and Geraldo Simon watched local, state and federal officials troop through their Edgemere front yard, marvel at their brick bungalow perched 15 feet in the air on posts and poke their heads into the trailer where the couple has been living for months.

Debra Simon said yesterday that she and her husband have managed to get their house lowered onto its new foundation, but the initial $52,000 settlement has been exhausted. Despite all the attention, three calls to the NFIP claims-review hot line, and letters to Sarbanes and Mikulski, she said, they haven't received another dime.