In a Recent Article Mr. Ellis, Vice President, was quoted as saying “But here you have a program (NFIP) that is subsidizing people to live and develop in harm’s way.”


Mr. Ellis was either misquoted, ill informed or working as a lobbyist for “Taxpayers with Common Sense”.


The federal government has NEVER Subsidized anything concerning the NFIP program.  There is a 24.5 Billion dollar loan to the NFIP.  Which NFIP has been paying $400 million dollars a year in interest payments.  There is only “subsidization” between NFIP policyholders, basically post firm properties pay higher premiums and fees to “subsidze” the pre-firm and SRL properties in the NFIP.


If Mr. Ellis’ statement was correct  –  then China, Japan and Germany, who buy most U.S. Bonds are “subsidizing” the United States.  We all know this is a loan.  At no point in time has the U.S Treasury or Federal Government “forgiven” any loans to the NFIP program.


If Mr. Ellis was truly an Advocate for all Taxpayers he would have raised alarm bells for the last decade about these issues ;


Reason #1 – Billion in Wind Claims transferred to NFIP program.


Reason # 2 – Only 44% of our premiums go toward paying of claims. Industry average is 70% . The 26% difference on 3.5 billion in premiums = $910 million a year in savings to pay off debt.

Reason # 3  – The flooding in New Orleans was caused by the failure of the levees built by Army Corp of Engineers.  Congressman Graves has attributed $18 Billion dollar charge to NFIP and Senator Menendez has attributed a $10 Billion dollar charge to NFIP that should be charged to ACoE.

Reason # 4  – The failure/mismanagement of FEMA / NFIP to mitigate these homes after the 2nd or 3rd flood should not be borne on the shoulders of NFIP policyholders.  No private insurance company would have allowed this to happen.  This is a failure of a federal agency, they should eat this $5 Billion dollars.


Furthermore Congressman Royce explains in this video 

  •  “SRL problem is outpacing  mitigation efforts by a factor of 10 to 1.”

  • “1 home valued at $69,000 flooded 34 times in 32 years.  It resulted in $663,000 in total claims”

  • “The worst part of this is the SRL problem keeps growing”



Reason # 5 – Only 50% of homes situated in flood zones, that have a federally backed mortgage – that are required to purchase flood insurance – do not carry flood insurance.  This is another monumental failure that would bring in well over a Billion a year in premiums.


Reason # 6  By Fema’s own commissioned Technical Mapping Advisory Council, the flood maps are +/- 40% wrong.  See how wildly the FEMA flood maps have changed in NY/NJ region two in just a few short years and how the premiums rise and fall in relation to these faulty flood maps.  If the maps are a mess, we can only assume the actuary side of our flood insurance premium is also a mess.  How can NFIP come to a flood insurance premium that remotely correlates with the true rise of the property?  Lastly New York City paid millions to challenge the flood maps and their accuracy.  The result was that FEMA’s “methodology is deficient” and there were numbers “mathematical errors” which produced significant errors with the mapping.  FEMA finally accepted FEMA’s map appeal and will be reducing elevations across the NY/NJ region between 1 and 2 feet.


REASON # 7 – Systematic Fraud and Underpayment of Flood Insurance  Claims  –  

What type of insurance company hires disbarred attorneys to litigate their claims?

What type of insurance company does not pay thousands of claims 5 years after the storm?

What type of insurance company gets caught being Fraudulent on 60 minutes and no one goes to jail or gets fired?

What type of  insurance company allows billions in fraud –  Wind claims to be FRAUDULENTLY transferred over to NFIP program ?

What type of insurance company is allowed to continue fraud and underpayment  in Southeast Lousiana  and be immune from litigation and no one gets fired ?

What type of insurance company allows fraud and underpayment to continue to happen for over a decade.  Not one person has been fired or put in jail.


Mr. Ellis, we are making you aware of these issues.  Please either debunk them or agree with them and show us you are truly working for the Taxpayer and not the Lobbyists.



George Kasimos

“A Taxpayer with Common Sense”


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