Effective June 30, 2020 at 5:00 PM, CFSIC has temporarily suspended the acceptance of applications, including applications for Pending claimants, until further notice.
Pending Claims: Background
On January 13, 2020, CFSIC created a third class of claimant…the “Pending” claimant. Prior to that time, a Type 1 or Type 2 claimant could be only an “Active” claimant (a claimant where the application is complete and where otherwise that claimant is potentially in line for funding) or an “Inactive” claimant (where for one or more reasons that claim cannot be made active.)
The Pending claimant concept was designed to help homeowners register their claims with CFSIC…even though we might never be able to provide those claims with funding, given what we know about the totality of our known funding sources.
When we re-opened our doors for applications on January 13, 2020, we did it solely for the Pending claimant class.
We did it that way because we calculated, at the time we re-opened our doors, that we would only have enough eventual funding to handle existing Active and Inactive claimants who had been in line for some time. We made it clear at the time we re-opened that no Pending claimant could count on funding.
On June 30, 2020 we closed our doors again. At that point we had 431 Pending claimants registered. Given what we know now about the extent of expected funding from the $12 per homeowner policy assessment being collected in Connecticut (Healthy Homes Fund), we believe that, eventually, we should be able to assist between 150 and 200 of the existing 431 Pending claimants who registered with us. This means that a large number of these claimants will never receive funding unless other sources of revenue can be found.
Lastly, CFSIC’s sunset date (the date it goes out of business) is still June 30, 2022, and unless it gets moved to June 30, 2030 or even later, even the 150 to 200 Pending claimants noted above won’t get funded…because CFSIC will have ceased operations.
After careful consideration, CFSIC has decided to re-open its doors for the taking of Type 1 applications effective December 7, 2020…and Type 2 applications effective December 14, 2020…but only for those homeowners who understand that they are applying as Pending claimants.
Our plan at this point is to see how it goes and how long we can reasonably sustain an influx of Pending claimants. Right now, the plan is to remain open for Pending claimants indefinitely.
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.
Question: I plan to file on December 14 as a Pending reimbursement claimant (Type 2). Do I have to wait for assistance until you start addressing all Pending claimants, or can I get in line for help faster?
Answer: The answer is you will have to wait until we start addressing all Pending claimants as a group.