Announcing Suspension of Participation Agreement Signing This Week
During this week, the Superintendent will countersign the last four Participation Agreements he can. At the end of this week, no more Participation Agreements will be signed until most probably after the 4th of July.
It’s important to understand what this means.
First, if your claim file has been moved by the ESIS claims team into the special line reserved for Participation Agreements, and you have not already been given a Participation Agreement to sign by the end of this week, you will not be getting one until July 2020 at a minimum. Some of you will not be getting one until most probably July of 2021.
This doesn’t mean that we have lost track of you. It doesn’t mean that your project will not eventually be funded. It doesn’t mean that your claim won’t be paid. What it means is that, through the careful rationing of our cash, we have come to the end of the line temporarily, because all of our current cash is committed to Participation Agreements already countersigned by the Superintendent. In fact, as of today, this also means that the next $20 million in funding we hope to get from the CT Bond Commission after July 1, 2020 has also been spoken for. Yes, you read that right…the people in line to receive Participation Agreements, where those agreements have not yet been countersigned by the Superintendent, will use up the next $20 million.
We at CFSIC…all of us…understand how frustrating this kind of “stop and start” in the program can be for claimants.
Claimants want to know when they can schedule work. There are many personal and business considerations that need to be considered before construction can begin. We at CFSIC understand that not even knowing the year in which your construction can begin places a terrible emotional burden on many claimants. The issue is now and has always been how much funding we will get and when we will get it. We at CFSIC know virtually nothing about the scheduling of funding in advance, but we remain as transparent as we can be about everything we know.
Meanwhile, the ESIS claims team will continue to move approved construction contracts into the Participation Agreement line in order to keep the process flowing.
Secondly, we have received numerous calls and emails from claimants indicating that “they have heard” that we have already received our first tranche of Healthy Homes surcharge funds. This is false.
The CT Insurance Department has informed us that we are not apt to get those funds until the end of June. Those funds are being collected by commercial insurers, month by month, as homeowner policies renew one by one…and those funds are being kept by the insurers, and will be kept by them, until funds are tabulated and transmitted to the Insurance Department at the end of April 2020.
No one knows how much we will get from the $12 per homeowner policy surcharge. Every estimate is a guess.
We will all learn, together at the same time, how much these funds amount to.
Lastly, to be clear…as of today there are 144 claimants in line to receive Participation Agreements, who will not get their agreements countersigned because of the date stamp of their file in the Participation Agreement line, and because the last four will be signed this week before we go into suspension. The total construction value for those 144 essentially eats straight through the $20 million we hope to get at some point after July 1, 2020. While those families are waiting…the Participation Agreement line keeps getting longer. The longer it gets, the more our funds are committed, and committed well in advance of when we will actually get them. It’s the way the system works.
Funding both now and in the future is the key challenge to the success of this program. An equal challenge is the amount of misinformation circulating about the way the numbers work in this program. The truth about the extent of CFSIC’s efforts resides on this website.
Meanwhile, we have returned 107 families to their homes and provided claim payments of almost $28 million to claimants. We have more than $25 million more in committed construction accounted for. We carry reserves on severity coded 3 and 2 claims for eventual payment amounting to $102 million.
Condo and PUD Update
We have made what we feel is great progress with condos and PUDs. We have already paid some PUD claims. We are going to pay more. Remediation on the first condo association should begin in the fall of 2020. Another condo association will receive more than $700,000 from CFSIC beginning in July 2020.
We have reserves on our books for all existing severity coded 3 and 2 condo and PUD claimants, so we haven’t lost track of anybody.
We are frequently now being called upon to mediate disputes among condo and PUD unit owners who can’t come to common agreement about how to proceed. This is not CFSIC’s job. Nothing will get done, particularly for the PUD units in question, until people begin to communicate with each other. By “people” we mean neighbors. If you own a PUD and you don’t already know your neighbor, then it may be time to rectify that situation.
At some point, CFSIC’s board will need to start leaving claimants behind who can’t get it together. We have people still in litigation and who apparently plan to stay in litigation indefinitely. We have claimants who still owe us (from January of 2019) additional critical information on their applications and who have gone dark. We have PUD unit owners who are in extreme disagreement about whether to get the work done or not.
CFSIC’s board will be making a decision about who to leave behind at some point, since CFSIC is all about making sure that victims are not re-victimized. CFSIC’s board believes that someone who filed an application and intends to do nothing about it, is someone standing in the way of another qualified homeowner claimant fully ready to go.
More on this particular subject will be announced in the coming weeks.
A Message to Severity Class 2 Claimants
We have a total of 179 claimants with Severity Class 2 foundations on our books.
174 of those claimants are active claimants. We hold financial reserves on them right now of $22,269,158.
Many of those claims represent applications that go back to the earliest days of our operations; and we know that Severity Class 2 claimants want and need answers about when we can get to them, how long it’s going to take, and whether will we have the money to fund their claims.
CFSIC’s board is very keenly aware of all of the concerns of our Severity Class 2 claimants.
As of this morning, we have created a new subsection in the “For Homeowners” section of this site, specifically designed for Type 1, Severity Class 2 claimants.
Where We Are
CFSIC continues to take applications under the “pending” status of claimant. It will stop doing that on February 29 at 5:00 PM.
We are working on revised infographics to include new data valid as of January 31, 2020. These infographics should be up on this site by the end of February and will include a significant amount of data on town-specific claim activity.
CFSIC Has Resumed Application Activity
CFSIC began taking applications again effective 9:00 AM on January 13. We have re-opened the electronic platform to accept applications for claimants who agree to be placed in “Pending” status, and we have also enabled applications to be sent to the ESIS team by mail or other means.
CFSIC will remain open for the taking of applications through close of business on February 29.
To be clear, any claimant making claim to CFSIC on or after January 13 will be placed in “Pending” status. This means that your claim will be neither active nor inactive, regardless of the severity class code assigned to your foundation. CFSIC will not place a statutory financial reserve on your Pending claim until and only if we determine that we have sufficient funds to move any or all Pending claims into either inactive or active status.
What follows are some links that will take you to where you need to go:
The following Q&A should help everyone understand what is happening on January 13.
Question: I’ve been waiting for you to reopen your doors. I have a verified severity class coded 3 foundation, and I want to apply as a Type 1 claimant. I’m going to apply right away on January 13. What will happen to my claim?
Answer: You will become a “Pending Claimant” in our system. That means that we are creating a third category of claimant effective January 13, 2020. Right now, CFSIC only permits a claimant to be “active” or “inactive.” On January 13, you will only be able to file as a claimant under the new third status of claimant…a Pending Claimant. This means that we will register your claim and all the data you send us. We will provide you with a claim number, and we will acknowledge your claim…BUT even if you have a verifiable severity code 3 claim, you will not be able to move out of Pending status to either inactive or active status unless and until CFSIC’s sunset date is moved forward beyond June 30, 2022 AND we determine, starting in June of 2020, what the most likely scenario is for the amount of money we will receive from our share of the Healthy Homes surcharge.
Question: Are you saying that, even if I have a completed application and a verified severity class code 3 foundation, you will be unable to make my claim “active” or even “inactive” on or after January 13?
Answer: That’s correct. You will not be able to be an active or inactive claimant until the two things above are determined. You will be a Pending Claimant. You may remain a Pending Claimant for a very long time.
Question: That doesn’t seem fair. Why is it happening that way?
Answer: Because, until the June 30, 2022 sunset date gets moved to a later date AND we actually see exactly how much money we are getting in June 2020 from the Healthy Homes surcharge, we are flying blind…we can’t set any more claim reserves on any new claims beyond what we’ve already done. If we do that, we run the risk of making promises to claimants on or after January 13 that we can’t fulfill.
Question: So if the sunset gets moved to, say, June 30, 2030 (the end of the Healthy Homes surcharge funding schedule)…are you saying that you will permit claimants who applied on or after January 13 to become active?
Answer: We’re almost saying that…the sunset date is only part of our problem. You have to remember that no one inside or outside of state government can tell us specifically how much revenue we’ll be getting from the Healthy Homes surcharge (just like no one inside or outside of state government can tell us when our next $20 million will be available to us from the CT Bond Commission). We must have time to evaluate both critical sources of revenue in order to make the best decision for homeowners.
Question: But don’t you know for certain that you’re getting approximately $8.5 million in June of 2020 and every year thereafter through June 30, 2030?
Answer: That’s the estimate…but it’s only an estimate. That could be the number. The number could be higher. The number could be considerably lower. No one can tell us.
Question: So if the sunset date gets moved, you get enough money in June of 2020, and you make my Pending Claim an active claim, and I am a severity class 3, that means I jump ahead of all the existing severity class 2s that have been in line since last year…right?
Answer: No. As of January 13, 2020, we are not going to permit any severity class 3 claim originally filed as a Pending Claim to jump ahead of an active severity class code 2 already registered with us as an active claim prior to January 13, 2020. We have many active severity class coded 2 claimants who have been in line since January of 2019, and we have determined that it is fair to issue Participation Agreements first for all existing active 3s and 2s in our system before any Pending Claimant can get in line for a Participation Agreement. This is only fair, given how long people have waited and the fact that we are only going to get $40M more in funding over the next two years from the CT Bond Commission source…and on top of that, we have virtually no idea how much we will get in Healthy Homes surcharge funds.
Question: But I thought severity class coded 3 claimants would always be ahead of everyone else. What has changed?
Answer: CFSIC’s Underwriting and Claims Management Guidelines will change effective January 13, 2020 to require that CFSIC issue Participation Agreements to valid, active severity coded 3 and 2 claimants who have been in line since the inception of our program before we move any other Pending claimants into active or even inactive status…regardless of funding amounts to come. If you file on or after January 13, we will have a record of your claim, and we will also have significantly more data about the extent of the crisis…but we’re not going to be able to do anything with your claim until the sunset date gets moved and we have evidence of a flow of predictable funds from the surcharge.
Question: How long are you going to keep the application process open from January 13?
Answer: A minimum of 30 days, but we don’t know exactly how long yet beyond that.
Question: Why don’t you know?
Answer: CFSIC’s fiscal year budget in the year July 1, 2019 through June 30, 2020 is finite. When claims enter our system, we are charged by our outsourced claims management service company on a per-claim basis, as each claim is entered into the system, is analyzed, and is assessed. We have enough budget for the remainder of the fiscal year for a reasonable number of claims to enter our system between now and June 30, 2020…but not for a significant number to enter our system.
Question: But can’t you make an educated guess as to the number of people who are going to apply on or after January 13?
Answer: No, we can’t. Just before we opened our doors on January 10, 2019, we were told by email and through social media sources that we would get as many as 7,000 applications and that our application system would crash. We got 227 on the first day. We have found, through experience, that the wild projections as to application activity were then and may continue to be exaggerated. The reality of people actually taking action is unknown. We hope to have many new Pending Claimants, which will send a strong message about our need for funding. But to be clear, we will all see together what we will see…when we all see it.
Question: I want to apply as a Type 2 claimant. Will all the same rules apply to me?
Answer: Yes. (With one exception: Type 2 claimants do not require a severity class coding.)
Question: This all seems like a lot of work just to get in line and have my claim be in pending status for what might be a really long time. Is all this worth it?
Answer: That’s totally up to you. We’re giving people an opportunity to give us the data we need to raise more funds by identifying more potential claimants, who we hope to be able to assist at some point in the future when those funds arrive. We’ve gotten emails asking us to re-open for this purpose. We’re doing it. The question now will be how many victims of this crisis will actually take us up on our offer: file a claim, get in line, and with their claims registered…send a strong message about our need for more funding.
The CHFA Credit Enhancements Program
You should go here to learn more about the CHFA credit enhancements program as it is now constituted. Please note that it currently does not apply to condominiums. CFSIC did not create and is not administering the loan program, and the ESIS claim team cannot advise you in any way about the terms and conditions of any aspect of the program. The link noted in this section will take you to an outline of the program, as well as to a section marked “Frequently Asked Questions.” We also recommend contacting the Homeowner Advocate using the contact information on the Department of Housing website for more assistance.
CFSIC’s Annual Report
CFSIC’s 2019 Audited Financial
If you have any questions about the operation of the program, ESIS is your best source of information on your claim, and their phone number and email are shown below.
As you work through the information and application process (understanding that we are in suspension for the taking of new applications), here’s how you can get help:
– Call ESIS (the claim adjuster) at: 844-763-1207
– Email ESIS at: email@example.com
– Email CFSIC at: firstname.lastname@example.org