CFSIC will be launching its program by November 15. There’s much to do by then, including the implementation of a major claims management process designed to be user-friendly and responsive to the needs of what we think may well be thousands of homeowners suffering from the crumbling foundations natural disaster.
The process of organizing CFSIC, of retaining needed service providers, of getting CFSIC licensed with the Connecticut Insurance Department, and, lastly, in securing a reliable flow of funds from the State of Connecticut into CFSIC’s account, only got underway in earnest on June 1.
In just a little under five months, CFSIC is now poised to begin the process of taking applications, adjusting and paying claims, and bringing needed relief to the hard-hit northeast corner of Connecticut.
Even when we do launch on November 15…the full implementation plan will still not be complete. We will not have an important part of CFSIC’s program in place, which is the Collapsing Foundations Credit Enhancements Program to be administered through the Connecticut Housing Finance Authority (CHFA). We have had discussions with CHFA as well as the Connecticut Bankers Association to implement this as a needed source of additional funding. A good dialogue is underway. More on this important part of CFSIC’s mission shortly.
We have opened a broad range of discussions with the property and casualty insurance industry in Connecticut, primarily through the auspices of the Insurance Association of Connecticut and other interested parties. We’ve had many meetings with industry representatives. We’ve explained what we’re doing and how we’re going to do it. While nothing definitive has been decided or done with the industry in Connecticut that would directly aid CFSIC’s claimants, what’s important is that people are speaking with each other. Solutions are being considered. Goals are being established for further consideration. I have no way of knowing where these discussions will lead, and when or even whether they will lead to something substantive, but I am very grateful for the time that insurance industry representatives have given me, and I have told all of them that, regardless of what happens, my door will always be open. For there even to have been discussions with the insurance industry about their possible collaboration with us is an important milestone. The insurance industry is a strong potential collaborator for CFSIC, and my board and I are engaging in every opportunity we can to ask them to be a robust participant in CFSIC’s future…which means, ultimately, the future of their policyholders.
Lastly, we’ve begun the process of engagement with the federal government. Congressman Joe Courtney’s office has been instrumental in getting us in front of the people at HUD so that we can make our case.
A captive insurance company, generally speaking, has two masters: its board of directors and the insurance regulator controlling its insurance license. CFSIC has many more than two. This is a blessing and is also presenting something of a challenge.
The blessing is that we are under intense scrutiny in everything we do. That’s only natural given our sources of funding, which right now are known to be only two sources…the allotment from the Bond Commission and the assessment on homeowners’ insurance policies. We welcome scrutiny. The only way to run a company like CFSIC is to be accountable.
The challenge before us is that we have many masters. As a result, we accept as a given that we will please fewer people than we would like to. There isn’t enough money to go around. That’s evident to anyone who’s taken the time to study the problem. Many people want to become involved in and second-guess every part of CFSIC’s process. We’ve opted for speed of delivery. What’s important, we believe, is that less smoke be blown at homeowners and more funds end up invested in their homes. That’s why we’re pressing ahead, even though we’ve been counseled to slow down. That’s why we’re moving quickly, even though we’ve endured some significant challenges to getting CFSIC launched and funded.
History will determine whether speed of delivery was the right course. But one thing is certain: it’s all talk until a homeowner can complete an application and a contractor’s deposit check can be cut. That’s pretty much all we’re focused on right now, and all we will be focused on.
Speaking personally, I have an idea and a theory:
The idea is that CFSIC opens its doors. It’s shown, in a brief space of time, to be an insurer interested in what happens to affected homeowners. Its professional administrative and claims management processes come to be viewed by the insurance industry and others as appropriate and effective. CFSIC starts adjusting claims. It starts cutting checks. It starts fulfilling its mission.
My theory is that everything starts at the point at which CFSIC proves what it can do. Other doors open. Other sources of funding become available. CFSIC’s five-year mandate gets extended. Concerned citizens realize that, while CFSIC’s plan is not perfect, it’s a start…and it’s a start in the right direction. My theory is a simple one: we begin and we succeed, and the world watches, and then the world starts to support us.
I know I speak for my Board of Directors when I tell you that the time for action is now. My board members, all of whom are volunteers and all of whom, despite their very busy lives, have committed a great deal of their time to this effort, are just as committed as I am.
The time to launch CFSIC is now. The time to start the slow but steady process of relief is now.
Michael Maglaras, Principal
Michael Maglaras & Company