The chairman of the House Committee on Homeland Security wants to pursue congressional investigations of insurers’ handling of claims arising out of Hurricane Katrina. Rep. Bennie G. Thompson (D-Miss.) claims the property/casualty industry sought to pass costs onto the National Flood Insurance Program and, ultimately, to taxpayers. “Congress will not sit idly by while insurance companies — who are making record profits — continue to shift the costs of this national disaster to the American taxpayer,” Thompson said in a statement.

A provision was included in last year’s Homeland Security Appropriations Act to require the Department of Homeland Security’s inspector general to investigate whether insurers in the Gulf Coast region, in their role as participants in the National Flood Insurance Program’s “Write Your Own” program, used claims adjustments to improperly assign to the flood program damages that should have been paid by standard windstorm coverage. The department is required to report its findings to Congress by April 1. The provision was inserted in the appropriations bill by Senate Minority Whip Trent Lott (R-Miss.), who is suing State Farm for denial of a Katrina damage claim for his home.

Thompson’s committee has jurisdiction over the Department of Homeland Security, which includes the Federal Emergency Management Agency. However, primary jurisdiction over the NFIP, which is overseen by FEMA, traditionally has fallen with the House Financial Services Committee.

January 17, 2007