U.S. flood program changes sought

Md. insurance leader gives suggestions to Congress

March 05, 2004|By Andrew A. Green | Andrew A. Green,SUN STAFF

Responding to hundreds of complaints from Tropical Storm Isabel victims, Maryland Insurance Commissioner Alfred W. Redmer Jr. called on Congress yesterday to re-examine the coverage offered under national flood insurance policies, require more training for those who sell them and establish deadlines for the adjustment of claims.

Redmer made the recommendations in a meeting with Maryland's U.S. representatives and senators, some of whom are to testify at a Senate subcommittee hearing Thursday on the National Flood Insurance Program.

He did not ask the lawmakers to clarify whether federal law precludes him from holding companies selling flood insurance to the same standards of conduct that Maryland law requires of companies selling other insurance.

Rep. C.A. Dutch Ruppersberger, who attended Redmer's briefing, said he believes that Congress should make sure that Redmer has that power.

"He's closer to the people, that's the bottom line," said Ruppersberger, a Baltimore County Democrat. "He has the ability to implement it right away, as opposed to the federal level, where you've got so much bureaucracy."

Many of Redmer's recommendations were similar to those identified by his predecessor, Steven B. Larsen, in a report released last month. For instance, both said insurance companies should be required to provide understandable explanations of what their policies cover.

Redmer, who has faced sharp criticism for his handling of post-Isabel flood insurance issues, delivered 11 pages of recommendations and observations about the program, which is overseen by the Federal Emergency Management Agency.

He said that companies selling flood insurance should not be able to hold up a claim on contents damage until a claim for structural damage is resolved. He said that the deadlines for flood victims to fill out certain paperwork should be extended and that an appeals process should be created for policyholders.

Redmer said the government should consider changing the portion of the policy stating that repairs must be made with material "of like kind and quality or its functional equivalent." An example, he wrote, is when a kitchen's granite countertops are valued by the appraiser the same as Formica countertops. "Both are functional equivalents, but while they are `like kind,' they are not `like quality.'"

Sen. Barbara A. Mikulski said in a statement that she and Sen. Paul S. Sarbanes will submit recommendations to improve flood insurance.

"People are still getting the runaround about their insurance," her statement said. "The National Flood Insurance Program wasn't there the way it should be."

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