Weather

FEMA issued a bulletin on the Hurricane Sandy Settlement Process

by | Mar 6, 2015 | News & Views

Bulletin W-15009

Issued March 5, 2015

MEMORANDUM FOR: Write Your Own (WYO) Principal Coordinators and the
National Flood Insurance Program (NFIP) Direct Servicing Agent

FROM: Brad J. Kieserman
Deputy Associate Administrator for Insurance
Federal Insurance and Mitigation Administration

SUBJECT: Hurricane Sandy Settlement Process – Payment of Litigation Expenses

FEMA is undertaking a review of all claims in litigation arising from Hurricane Sandy to expeditiously
resolve those claims. As part of this settlement process, FEMA will review each claim in litigation and
determine an appropriate amount to be paid to the policyholder. FEMA will then instruct the WYO Company
to issue a payment for each case to its policyholder consistent with the standard release and settlement
agreement. Payment of claims under this process falls within the scope of the Federal Emergency
Management Agency, Federal Insurance Administration, Financial Assistance/Subsidy Arrangement
(“Arrangement”).

Under the Arrangement, FEMA will reimburse the WYO Companies for all Loss Payments, which include
“payments as a result of litigation that arises under the scope of this Arrangement.” 44 C.F.R. Part 62, Appen.
A, Art. III(D). This means FEMA will reimburse WYO Companies for any litigation costs, including
attorney fees, and civil judgments and awards, arising from this settlement process. Given that FEMA will be
making all decisions regarding settlement in this process, FEMA accepts full responsibility for the scope and
amount of such payments made to policy holders for purposes of any subsequent audit. Accordingly, FEMA
will not seek to recoup from WYO companies funds paid to policy holders through this settlement process as
a result of any subsequent audit finding because the decision to make the payment rests solely with FEMA,
not with the respective WYO company.

Any questions or comments should be directed to Jordan Fried, Director (Acting), Risk Insurance Division, at
(202) 646-4112 or jordan.fried@fema.dhs.gov.

Author