Latest News…November 22, 2021

Contractor Responsibilities…

This posting is directed to the CRCOG-vetted contractors being paid by CFSIC to do the important work of foundation remediation for the victims of this crisis.

We’ve recently learned of an example of a contractor, frequently using subcontractors on the job, who has adopted the position that, if a claimant has an issue or a problem with the work being done, the claimant should deal with the subcontractor on the jobsite…rather than bringing that concern to the attention of the contractor.

CFSIC’s position is a little bit different.

If you are a contractor, and you’ve entered into a written construction contract with one of our claimants, we don’t care how many subcontractors you use, but we fully expect any homeowner’s issues or concerns that arise on the jobsite be addressed directly by you…and that you instruct your subs of a claimant’s right to contact and deal directly with you at all times.

We at CFSIC spend a lot of time trying to police abuses and potential abuses of the CFSIC system. This includes contractors. We’re going to have zero tolerance for any contractor who is unwilling to deal directly with their claimants on all issues concerning each and every remediation.

We will remove immediately and permanently any contractor unwilling to comply with this expectation. Removal from the program will mean an immediate return of all deposits held by that contractor for future work.

We encourage claimants during their foundation’s remediation to contact their assigned claim adjuster at ESIS if at any time their calls or emails aren’t being returned, or their concerns aren’t being addressed, by the person with whom they have signed their construction contract.

To be clear: we have many contractors doing remediations who not only do good work, but who also deal efficiently, compassionately, and without arrogance with the claimants who have entrusted their homes to them. We’re speaking very directly today to a small handful of contractors who do not seem to understand, even after these many months, the importance of the task they have been given, and the compassion and understanding they must at all times exhibit. Regardless of whether you as a contractor are approved by CRCOG…CFSIC can and will shut you off from the program if you are unwilling to deal directly with the people who have entrusted you with their home.

Be aware of these words…and make sure you educate your subs.

Protecting the Claim Transfer Process

Effective November 16 at 5:00 PM CFSIC has instituted a tightening of the claim transfer process. Go here to see highlighted changes to CFSIC’s Underwriting and Claims Management Guideline.

Annual Report Infographics

At the recent Annual Meeting of the board of CFSIC, the Superintendent presented the board with some infographics on the status of the program. Click here see this PowerPoint in its entirety. This is a supplement to CFSIC’s Annual Report dated September 29, 2021.

CFSIC’s Audited Financial Is Available

The Board of CFSIC was presented at its recent Annual Meeting with CFSIC’s independently audited financial report. By way of reminder, the independent auditor retained by CFSIC performs two audits: a statutory audit on behalf of the Connecticut Insurance Department and the Board, and an independent state audit provided to state government. CFSIC’s 2021 audit is posted here.

The claims disbursement process was tested independently. The separate cash disbursement process was tested. The audit was independent, vigorous, and complete. No exceptions were noted in the audited financial concerning any aspect of CFSIC’s operations.

By way of reminder, CFSIC’s auditor is the only service provider that does not report directly to the Superintendent and only to the Board of Directors.

Read CFSIC’s Third Annual Report

CFSIC believes in transparency and in data. The only way victims have been helped and can be helped is through an understanding of what we’ve accomplished, and how far we have yet to go. You can read the Superintendent’s 2021 Annual Report to CFSIC’s Board of Directors here.

How We Pay a Claim

This week we are pleased to feature a new white paper written by Kevin Miller on the importance of the visual examination of impaired foundations. This link will take you to this latest installment in this series.

An insurance company has to have a process by which it pays (it adjusts) a claim.

A state insurance commissioner, whether the insurance company in question is a captive or it is not, will not approve an operational plan for that insurance company unless that regulator is satisfied that the factors used to determine how a claim is paid are correct, fair, and based on logic.

This is why CFSIC does not use the results of foundation testing (whether through the extraction of a core sample or by other means) in determining how we actually pay a claim…how we disperse taxpayer funds.

While we believe that the victims of this crisis need to have any information about their foundation that they can get…including the results of foundation testing…the results of foundation testing are not the basis on which CFSIC pays a claim.

There are very good reasons for this.

When CFSIC opened its doors on January 10, 2019, its Board of Directors was under significant public pressure, primarily from some concrete activists, to use the results of foundation testing as the basis on which claims should be paid.

After a lot of consideration, CFSIC’s board rightly rejected that idea. Given CFSIC’s limited financial resources (which are still limited) CFSIC’s Board of Directors chose to create an underwriting and claims payment platform based on the quantifiable severity of impairment…a visual examination by qualified professionals, documented by photographic and measurement evidence, as the basis of prioritizing who would get their claim paid first.

How could we have built a claims management platform off the results of pyrrhotite testing? Let’s ask ourselves a series of questions that will help us get to the answer.

– Does a positive core sample tell you how badly your foundation has deteriorated?

– Do the results of concrete sampling predict when a perfect foundation (with no hint of impairment) might begin to show signs of impairment?

– Does it predict the year or even the decade when that might occur?

– Does it predict with any accuracy, once the impairment begins to show itself, how long it will take before you can no longer close your front door?

– In fact, does it actually predict anything at all with certainty?

The answer is “no.”

Not only that, but we at CFSIC believe that it may be a decade or more before enough data is collected to begin the process of what we call “predictive modeling.” Meanwhile, what do we do with claimants whose foundations are obviously impaired? By that, we mean visibly, quantifiably impaired. Do we tell them that, even though they have the scientifically proven visual outward signs of pyrrhotite, they still need to get a test? What happens months later and what do we tell them when they are facing bankruptcy or possibly even eviction because the structure is unsafe? Do we tell them “…sorry, we can’t help you, even though your basement obviously has a pyrrhotite infection, because our claims management guidelines don’t allow us to pay a claim without a core test”?

CFSIC felt it needed to move quickly, because the victims of this crisis were suffering emotional as well as financial loss.

We felt it was important to prioritize severe, scientifically quantifiable and measurable foundation impairment. We felt that, when a victim can no longer close their front door because of a crumbling foundation, that was far more important than whether or not that foundation had tested positive for pyrrhotite and at what level.

We still believe this to be the case.

We asked those then who wanted us to use a positive pyrrhotite test as the basis of disbursing taxpayer funds just how it would work. If your foundation tested positive for pyrrhotite (in whatever amount) and your foundation was still in perfect condition…did that mean that the taxpayers of CT should tear down that perfect foundation…a foundation that is not failing…and replace it just because that foundation might fail in the future? No one we spoke with inside or outside of state government thought that was a great idea, except for a handful of crumbling foundation activists.

If CFSIC had adopted a positive foundation test as the criterion for using taxpayer funds, how would we have identified who should be first in line? How would we have determined who was placed ahead of whom…especially when some people were unable to close their kitchen cabinet doors anymore?

There is no scientific and no statistical evidence supporting the idea that foundation testing results can predict, with any certainty, when a foundation will fail or even if it will at all. Make no mistake: CFSIC is not anti-testing. Far from it. CFSIC is about the use of hard facts in the disbursement of taxpayer funds.

Once testing data becomes available with statistical validity, CFSIC will not hesitate to use it, and it will not hesitate to build that data quickly and absolutely into our claims management program. Until that time comes, foundation testing is not the basis on which CFSIC pays claims.

CFSIC’s board had a choice: it could adopt a rational visual examination policy to rapidly put people in line who were the victims who were suffering the most…or it could have relied on who got a core test first. Had we done the latter, very few homes would now be remediated in Connecticut.

We believed then, and we believe now, that the visible manifestations of pyrrhotite infection, observed and documented by trained professionals, is the way that a professional insurance company’s claims program needs to operate. We are not going to change that position any time soon.

Ask any one of the 37 victims in Stafford Springs, CT whose foundations we have already replaced in 28 months whether they would have preferred us to use the results of foundation testing versus the results of visual examination in determining how their claims were paid. If you can walk into your basement and, because of your crumbling foundation, you don’t need to turn the lights on because sunlight is pouring in through the cracks…we think the answer is obvious.

CFSIC has never been approached at any time to collaborate with anyone validly collecting the results of testing information. We find that puzzling, as CFSIC is all about collaboration and all about the reasonable sharing of information for the public’s benefit. If we weren’t about sharing data, then our data would not be up on our website. We did experiment briefly with one possible collaboration in this regard…but we stopped when it became clear that it wasn’t going to be a collaboration of equals.

We stand ready to receive and accept valid foundation testing data and to incorporate it into our underwriting system when that data becomes available by way of using it to predictively model exactly when a foundation will fail.

Until then, we’re busy putting lives back together and restoring the tax base in the hard-hit towns of the Northeast Corner of Connecticut.

Next $20M Received!

CFSIC has received the next $20M in CT Bond Commission allotment…the last allotment of the original $100M pledged by the State of CT to get CFSIC’s remediation program off the ground.

We are grateful to DOH Commissioner Mosquera-Bruno and her team for partnering with us to get this job done.

The Superintendent has directed CFSIC to re-open its doors this week for the issuance of new Participation Agreements.

For the first time, we will be getting to Severity Class code 2 foundations, which is great news for those families who have been waiting in line a long time.

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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.

Phone: 844-763-1207

Email: cfsic@esis.com

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: cfsic@esis.com

– Email CFSIC at: info@crumblingfoundations.org

To view a video of how to complete an electronic application, go here.

To apply for a Type 1 claim, go here.

To apply for a Type 2 claim, go here.

To learn more about the program, if you are a homeowner, including application help, go here.

To learn more about the program, if you are a contractor, go here.