Announcing: Re-opening Our Doors for Pending Claimants
On December 7, 2020, we will re-open our doors for those claimants wishing to file as Pending claimants.
To be clear, you cannot file as any other kind of claimant. We cannot make any Pending claimant already in our system, or coming into our system on or after December 7, either an Inactive or Active claimant, and you cannot as a Pending claimant move into line, currently, to receive a Participation Agreement.
Our doors won’t open before December 7.
The following Q&A should help everyone understand more about how the Pending claim concept works.
Question: I have a verified Severity Class coded 3 foundation, and I just found that out. If I apply, do I get in line right away?
Answer: No. All you can become, once we re-open our doors for applications on December 7, 2020, is a “Pending Claimant” with a Severity Class 3 foundation. You will be joining, when you apply, a list of existing Pending claimants, many of whom are also Severity Class 3. At this point, applying as a Pending claimant does not put you in line for remediation…it only allows you to register the existence of your impaired foundation with us.
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 December 7, 2020?
Answer: That’s currently correct. You will not be able to become an Active or Inactive claimant until all current Active and Inactive claimants now in line have their claims fully adjusted and their funds committed by CFSIC. You will be a Pending claimant. You may remain a Pending claimant for a very long time. You may never receive any funding, given our current projection of revenue between now and June 30, 2030.
Question: But don’t you know for certain that you’ll be getting one more payment of $20 million sometime after July 1 of 2021 and around $11.6 million to $12.0 million in June of 2021 and every year thereafter through June 30, 2030 (if they change the current sunset date of June 30, 2022)?
Answer: We have every expectation of getting our last $20 million of Bond Commission funding in the summer of ’21, and we believe that we’ll get $11.6M to $12.0M at around the same time for the second installment of Healthy Homes funding. We should get eight more installments of Healthy Homes funds after that, annually, for similar amounts. But we want to be clear…all that funding is currently allotted to Active, and Inactive claimants (who will become Active), with Severity Class 3 and 2 foundations, most probably through the end of 2026 or the beginning of 2027. If at that time we get through the current list of those in line for a Participation Agreement, as well as others who can move into that line, in 2027 we are only going to start to get to between 150 and 200 Pending claimants who were already been in line before December 7, 2020.
Question: So if I apply as a Pending claimant now, do I still get a claim number?
Answer: You do, and that claim number means you are registered in our system.
Question: So that means a claim adjuster will reach out to me?
Answer: No. You will have no contact with a claim adjuster. You won’t have that contact until and unless your claim moves into Inactive or Active status. CFSIC’s adjusters are very busy managing the day-to-day process of existing Active and Inactive claimants as well as all the construction associated with those claims.
Question: Can I file a claim as a Pending claimant and I just file the application, even if I don’t have all my points of evidence?
Answer: You can…and you will still get a claim number…but remember: you will never be able to move beyond that point to Active status, if funds become available, until your application is complete in each and every regard.
Question: So if the sunset date gets moved, you get enough money in June of 2021, and you make my Pending claim an Active claim in, say, 2028, and I am a Severity Class 3, that means I jump ahead of all the existing Active Severity Class 2s that have been in line since January 10, 2019…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.
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 changed effective January 13, 2020, and that change was published on this site, to require that CFSIC issue Participation Agreements to valid, Active Severity Class 3 and 2 claimants who have been in line since the inception of our program before we move any Pending claimants into Active or even Inactive status…regardless of funding amounts to come.
Question: This sounds very discouraging. I guess I’m wondering why I would bother to register my claim with CFSIC given this outlook for the future.
Answer: The choice to apply, of course, is yours. But there are a few reasons why you might want to do this. First, to the extent more funds are made available legislatively in future, we may be able to get to you and get to you sooner than anticipated. Also, you should be aware that there has been some discussion with the Superintendent’s office and officials of state government about the possibility of accelerating part or all of our anticipated Healthy Homes funding. We have no idea where these discussion are going, as they are in the most preliminary phase. Also, if you are a valid Pending claimant who has registered your claim with us, and you decide later to sell your home, as a Pending claimant validly in our system you can transfer your claim to the person buying your home. This may have some value to you. Lastly, we encourage homeowners to think of the greater good…the more claimants in our system who hold Pending status, the greater likelihood, we think, of making a valid case for increased funding at the state and/or federal level.
CFSIC Reaches Another Important Milestone
The following press release was released on November 23, 2020:
Michael Maglaras, Principal of Michael Maglaras & Company and Superintendent of Connecticut Foundation Solutions Indemnity Company, Inc. (“CFSIC”), the captive insurance company now providing financial assistance to homeowners affected by the crumbling foundations natural disaster, has announced that CFSIC has successfully completed more than 250 foundation replacements since its launch on January 10, 2019.
“With 251 families back in their homes in 22 months, we’ve reached an important milestone,” said Maglaras. “We received word today that, with a foundation replacement in Storrs, we had hit the number 251.”
Steve Werbner, President of CFSIC, added, “We’re now approaching the winter season, and we know that construction in some cases will slow down dramatically and then pick up speed again in April. Contractors are working around the clock to get homes completed, and families back where they should be, before Christmas.”
Maglaras also reported that, so far, CFSIC has paid $53.8 million in claims, of which $46.3 million has been paid to Type 1 claimants and $7.5 million to Type 2 claimants.
“We found out late last week that our original stop date of February 26, 2020 for those in the Participation Agreement line waiting for help could actually be extended two more days, to February 28,” added Maglaras. “With those two days, we were able to add 20 more condominium units for remediation inside the current funding period.”
State Representative Jeff Currey (Democrat, Deputy Majority Leader, East Hartford, Manchester, and South Windsor, and a CFSIC ex-officio board member) remarked, “The number of completed foundations is climbing, and CFSIC is addressing the needs of the victims of this terrible crisis in ways that we can all celebrate. With so much unfortunate news every day…I think we can give thanks for the great work being done by the team at CFSIC, and I look forward to hitting number 300!”
Is Your Claim Still Inactive?
We’re pleased to report that fewer and fewer CFSIC claimants are categorized as Inactive.
Right now, we have a total of 13 Inactive claimants (not counting Pending claimants who cannot be made Active, or even Inactive, for the foreseeable future).
Seven of those Severity Class 3 claimants are Inactive primarily due to incomplete applications; three claimants are awaiting approvals/declinations of their commercial insurance claims; and three are still in litigation.
Among Severity Class 2 claimants, none are in litigation; two are awaiting approvals/declinations of their commercial insurance claims; and one is Inactive because of an administrative issue.
It’s important to point out that these numbers are far fewer than we saw a year ago. It means that claimants are working hard to make their files active, which is the only way, once more funding arrives, for them to get in line for a Participation Agreement.
CFSIC’s 2020 Annual Audit
CFSIC believes that reasonable transparency about all important aspects of our operations is important. This is in keeping not only with our stated mission of service, but also with our federal tax-exempt status as a 501(c)(3). You can find CFSIC’s audited financial report for the period ended June 30, 2020 here. CFSIC was audited by an independent auditor chosen by CFSIC’s board of directors, and where that auditor reports directly to CFSIC’s board with its findings and conclusions. This auditor did in fact report to CFSIC’s board at the recent Annual Meeting of CFSIC. The audit is a qualified opinion. It is qualified because CFSIC books and carries recorded and identified claim liabilities well in excess of its current assets. This is a practice permitted by the Connecticut Insurance Department. With the exception of the qualified opinion for the reason noted above, the auditor’s opinion was clean in all other respects. No internal control deficiencies were noted. 120 randomly selected claims and disbursements were tested for adherence to written policies and procedures. Disbursements were checked and verified.
Transferring Your Claim
All CFSIC claimants (not just active claimants) will be able to transfer their existing inactive or Pending claims to a buyer of their home effective July 13, 2020, retroactive to June 1, 2020. Today, we are publishing on this site the following:
– red-marked changes to CFSIC’s Underwriting and Claims Management Guidelines;
– a new subsection, subsection 20, in the “For Homeowners” section of this site, which will detail how the process will work, inclusive of Q&A;
– a templated Claim Transfer Agreement governing the transfer of a claim in the “For Homeowners” section;
– a new subsection, subsection 11, in the “For Contractors” section of this site, providing claim transfer information for contractors.
What follows is an expanded (expanded from last week) Q&A about this important change.
Question: I’m a Type 1, severity Class 2, inactive claimant. If I sell my home and transfer my claim to the buyer, does that change the status of my claim?
Answer: No. The buyer gets the exact status you had at the moment of transfer.
Question: I’m in line for a Participation Agreement and have been in line for a while. I’ve been told that I may be in the next round of funding at some point after July 1, 2020, but I still plan to sell my house and give up my claim. Does my exact place in line for a Participation Agreement get transferred to the buyer?
Answer: Yes, if the buyer agrees to all terms and conditions of the Claim Transfer Agreement.
Question: Where can I find a sample of the Claim Transfer Agreement on this site?
Question: I’m a Pending claimant, and I’m aware that, given current anticipated projected funding, I may never get my claim paid unless CFSIC gets more money. If I transfer my claim because I sell my home, will the buyer be taking the same risk I am?
Answer: Absolutely. We may never have enough money to address Pending claimants.
Question: Can I transfer my claim without selling my home?
Question: Does this apply to condos? Does it apply to PUDs?
Answer: No for condos. (Remember that condo unit owners are technically not our claimants… associations are our claimants, because it is the association that owns the foundation.) It applies to PUDs.
Question: I’m a Type 2 claimant. Does it apply to my claim?
Question: Once I transfer my Type 1 claim to the buyer, can he or she re-sell the home and transfer the claim again?
Answer: No. The transfer of a claim can occur only once…from one Original Claimant to one Transfer Claimant. It can never be transferred again by the Transfer Claimant.
Question: Will I be able to sell my home first and then transfer the claim at some point after that?
Answer: No. The Claim Transfer Agreement date can only be the same date as the date of the sale of the home or a date prior to the sale. It it’s prior to the date of sale, and for some reason the sale does not go through…then the transfer is voided as if it had never occurred.
Question: OK, but I sold my house in the middle of June…how will the retroactive June 1 date affect me?
Answer: As stated above, on and after July 13, 2020, the date of the Claim Transfer Agreement must be the date of the sale of the home or a date prior to the sale. It cannot, however, be a date prior to June 1, 2020. In your example, you would still qualify.
Question: So are you saying that if I sold my home on May 15, 2020, I’m disqualified?
Answer: Yes, that’s what we’re saying…besides, at the date of sale you ceased to be a CFSIC claimant anyway, and the correct thing to do would have been to notify ESIS of your status so that someone else could have access to your funds. We are grandfathering this process back to June 1 as an accommodation only.
Question: Are you still going to stop the Pending application process on June 30 as previously announced?
Answer: Yes. We have already done so.
Question: I’m a Type 1, severity Class 3 active claimant. So if I transfer my claim to the buyer of my home, what am I really doing?
Answer: Looks like you don’t have a Participation Agreement yet, based on the question. So, what you’re doing is transferring almost every right, obligation, and duty you had for your active claim to the buyer of your home, who then agrees to take over those rights, duties, and obligations.
Question: But I’ve got a signed contract and am in line for a Participation Agreement. What happens if the buyer and the contractor can’t agree on the terms of the original contract or, alternatively, the contractor simply backs out of the arrangement?
Answer: The buyer can seek the required two proposals for construction services from CRCOG-approved contractors to substitute for the original contractor, one of which will eventually substitute for the original contract. CFSIC will keep an active claim “active” for a period of 180 days from the date of the Claim Transfer Agreement in order to allow time for this to happen. If it isn’t accomplished by then, the claim is removed from our system, it is no longer active, and the buyer is no longer in line…and must therefore start the process all over again as if the claim had never transferred. If we are not accepting applications at the time that happens, then the buyer may have to wait for years to reapply, or may never get an opportunity.
Question: Who is responsible for contacting ESIS ProClaim to tell them about the sale of a home?
Answer: Only the original homeowner (Original Claimant). ESIS will not accept communications of any kind from real estate agents or from Transfer Claimants (home buyers) regarding a claim transfer.
Question: Okay…what happens then?
Answer: When you provide ESIS ProClaim with your claim number by phone or email and indicate that you want to transfer your claim to the buyer of your home, they will provide you with a Claim Transfer Data Form to complete. You will send it back to them completed. The Superintendent’s office will then contact you and send you a Claim Transfer Agreement, which will require your signature and that of the buyer, as well as separate witnesses. You will return the fully-executed Claim Transfer Agreement back to the Superintendent’s office. Once this agreement is fully executed and received in the Superintendent’s office, the transfer of the claim can occur, and the permanent records of the claim are changed with regard to who the claimant is.
Question: I’ve already signed a proposal with a contractor. Who is responsible for telling the contractor that I’m selling my home?
Answer: You are. It is not ESIS ProClaim’s responsibility or CFSIC’s responsibility to do this. It also cannot be the real estate agent or the homebuyer. If you want to transfer your claim, you have to do this yourself.
Question: What will CFSIC accept as evidence that the Original Claimant has transferred the home to the Transfer Claimant?
Answer: A copy of the recorded deed.
Question: But I have a CHFA loan agreement that I’ve just entered into. What happens to that?
Answer: You have to address that with CHFA.
Question: My contractor started work on my foundation last week. Can I still transfer my claim?
Answer: No. Once work starts on your foundation, you have to see it through, or you terminate your construction contract. We cannot permit a claim to transfer if even the most preliminary part of the remediation process has begun.
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 2020 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: firstname.lastname@example.org
– Email CFSIC at: email@example.com