Resigning NFIP chief slams insurers as “increasingly disconnected” from customers

The public sector’s onslaught against insurers administering flood policies continues, as ex- NFIP head calls the program a “melting iceberg.”

Insurance News


The public sector’s negative onslaught against insurance companies administering government flood policies continued this week as the departing director of the National Flood Insurance Program fired shots at the Write Your Own (WYO) program before leaving office.

Brad Kieserman announced his resignation as NFIP director just four months after being promoted to the position, planning to leave for an executive role with the Red Cross.

Kieserman, who is best known as heading FEMA’s investigation into insurers that allegedly underpaid Sandy victims, did not go quietly, however.

Kieserman called NFIP a “melting iceberg” and slammed NFIP-affiliated insurers as having become “increasingly disconnected from real customers, flood survivors.”

He also criticized FEMA for failing to place tighter constraints on the WYO program, particularly involving private insurers that delegate engineering and other work.

Kieserman’s latest critical comments follow recent legislative calls to gut NFIP and remove insurers administering the policies. Senator Charles Schumer of New York made headlines late last month after calling for FEMA to cease working with the more than 80 carriers that manage flood policies and process claims.

“These independent companies simply do not have homeowners’ best interests at heart,” the senior senator from New York said Thursday.

He went on to link insurers’ “profit-driven motivations” with the alleged mistreatment of Sandy victims.

Schumer proposed that the Federal Emergency Management Agency work with a single company to sell and manage policies – a plan that FEMA spokesperson Rafael Lemaitre said is being considered.

“Everything is the table,” Lemaitre told Newsday, saying government officials share Schumer’s concerns about the program.
Insurance industry professionals, meanwhile, are adamant that allowing just one company to service flood insurance in the US would ultimately hurt consumers.

“The immediate loser in this equation would be the policyholders,” Robert Hartwig, president of the Insurance Information Institute, said.

He stressed that scrapping carrier involvement would result in fewer options and less choice for consumers, as well as a stronger monopoly for the government.

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