In the wake of Hurricane Irene and Tropical Storm Lee, New York insurance regulators have been inundated with consumer complaints regarding claims. State regulators have been aggressively pressuring insurers and FEMA to resolve complaints and pay out claims, but their actions have run afoul of federal regulators who claim that the state is over stepping its boundaries. In October, FEMA issued a statement regarding the New York Department of Financial Services, decrying the department’s efforts in obtaining information from insurance companies. State regulators, in response, have only continued to work toward a resolution.
After the disastrous storms, more than 127,000 claims were filed throughout the state. State regulators had attempted to get insurers to cover the damage caused by the storms, but their efforts had been blocked by FEMA. After the storms, FEMA encouraged insurers to cooperate with regulators, but under strict guidelines. According to FEMA, state regulators are not authorized to interfere with the handling of claims procedures as flood insurance policies are governed by federal law.
Department of Financial Services Superintendent Benjamin Lawsky claims that the legislation that established the National Flood Insurance Program does not pre-empt state regulators from handling claims. Lawsky has petitioned the federal government to step in and handle the matter, and has said that “we (state regulators) will do everything in our power to ensure that insurance claims are dealt with fairly and quickly.”
