Lack of Data in Flood Program Inhibits Insurance Analysis

Two federal officials, Matt Jadacki, deputy inspector general for the Department of Homeland Security, or Orice Williams, director of financial markets and community investment for the U.S. Government Accountability Office, testified on Tuesday that the federal flood insurance program lacks a system to coordinate benefits with private policies. As a result the program often relies on insurance carriers to determine the breakdown of damages between wind and water, leading to potential conflicts of interest.  
 
However, neither official could state whether insurance companies improperly shifted Katrina claims to the federal flood insurance program, partly because of the fact that federal administrators don't store wind damage data in their files. adacki said his agency has had difficulty obtaining information from the Federal Emergency Management Agency, which oversees the flood insurance program, and from private insurers, and is now subpoenaing the documents. 

Published on June 13, 2007