An investigation has now been launched by New York Attorney General Eric Schneiderman.
New York Attorney General Eric Schneiderman is now making insurance news by opening a criminal probe into widespread accusations that have been made by the victims of Hurricane Sandy, who have said that their claims for flood damage have been rejected by their insurers as a result of engineering reports that were falsified.
Three lawsuits have been filed by homeowners insurance customers in federal court, against the insurers.
This insurance news involves at least three lawsuits in which insurers who have contracts with the National Flood Insurance Program of the federal government. The suits accuse the insurance companies of having schemed with individuals involved in the handling of the claims, such as engineering firms, in order to fraudulently reduce the payouts for damage, or to deny them altogether, through the use of manipulated reports. Schneiderman has now opened an investigation in order to determine whether or not there were any crimes committed. This, according to an unidentified source who provided the information to Bloomberg.
The insurance news continues as insurers have been required to disclose the drafts of hundreds of claim reports.
A Central Islip, New York, federal magistrate judge has now instructed insurance companies – including units of Hartford Financial Services Group and of Travelers, as well as Wright National Flood Insurance – that they must disclose the draft reports that were made for hundreds of different policyholders, with regards to the claims that were made following Superstorm Sandy.
That ruling was made back in November, at which time, U.S. Magistrate Judge Gary R. Brown said that he had found indications of “unprincipled practices” within the handling of the engineering reports that were made for a homeowners in Long Beach, New York. He issued the ruling out of fears that this practice may not have been an isolated case, but that it could be “widespread.”
This insurance news continued in December, when, on the fifth of that month, Federal Emergency Management Agency Administrator W. Craig Fugate urged private insurers who took part in the flood insurance program to also disclose their own Sandy claim draft reports in New York as well as in other states.