U.S. Rep. Chris Smith, Dean of the New Jersey Congressional Delegation, hosted a meeting between a bipartisan group of the N.J. delegation and Brad Kieserman, Deputy Associate Administrator for Insurance for the Federal Emergency Management Agency (FEMA), to address credible charges of fraud and underpayments of flood insurance claims to Superstorm Sandy victims through the National Flood Insurance Program (NFIP) and to discuss the retrospective reopening of claims, among other issues. 

            “Deputy Associate Administrator Kieserman assured us that FEMA will move quickly to establish a robust and thorough claims process to reopen and reexamine all potential underpayments to Sandy victims,” said Smith. “We were assured that FEMA has the personnel and funding necessary to undertake this process, that policyholders will be put on direct notice, and that external transparency will be present throughout.”

            Kieserman told the representatives that the retrospective claims process will be dealt with in tranches, beginning with those claims that required an engineering inspection—instances in which FEMA has seen direct evidence of fraudulent and altered engineering reports, as well as the use of unlicensed engineers. FEMA will then address all other potential underpayments, at which point policyholders can submit evidence to support their claim.

            “I am pleased that there will be fresh eyes reviewing these claims, taking them one-by-one, and using the homeowner’s evidence of an underpayment as the basis for the final determination,” continued Smith. “I look forward to working closely with FEMA and other members of the Task Force to establish an equitable system that properly evaluates the evidence and ensures that there are no incentives to push down or deflate fair payments to policyholders.”

            Smith also urged Kieserman to fully investigate the software utilized by the NFIP, insurance companies, and adjusters to determine if the systems failed to account for New Jersey’s high cost-of-living when making final payments. Smith pointed to the U.S. Department of Housing and Urban Development’s Section 8 Income Limits, which adjust for differing economic conditions within each Metropolitan Statistical Area (MSA). In a previous phone call, Kieserman indicated to Smith that well-under market cost estimates resulted in underpayments.

            Smith was joined in the meeting by Reps. Frank LoBiondo (NJ-02), Albio Sires (NJ-08), Tom MacArthur (NJ-03), Frank Pallone (NJ-06), Rodney Frelinghuysen (NJ-11), and Scott Garrett (NJ-05), as well staff representing other Members of the delegation.

           Smith invited Kieserman to a meeting during a March 4^th phone call, noting the delegation’s past work together in fighting for Sandy victims, from securing federal Homeland Security monies for NJ, to passing supplemental disaster funding and pressing Secretary Shaun Donovan of the U.S. Department of Housing and Urban Development for additional recovery assistance.

         The Deputy Associate Administrator has agreed to meet with Smith and the delegation again as the process for retrospective claims is established and finalized—within approximately 45 days.

 ###