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Insurance Waiver

Appeal Brief Appeal Letter

Appeal Brief

DisasterFEMA-1606-DR
ApplicantTexas Parks and Wildlife Department
Appeal TypeSecond
PA ID#000-U00FB-00
PW ID#xxxx
Date Signed2008-02-21T05:00:00
Citation: FEMA-1606-DR-TX; Texas Parks and Wildlife Department

Cross-reference: Insurance Waiver

Summary: As a direct result of high winds, extensive rainfall, flooding, and storm surge associated with Hurricane Rita (September 23, 2005), severe damage occurred at several Texas Parks and Wildlife Department (Applicant) facilities located at multiple Texas State Parks. FEMA prepared PWs for the facilities with a reference to the regulations (44 CFR §§206.252(d) and 206.253(e)) that require applicants to obtain and maintain insurance as a condition of receiving federal assistance.

TPWD petitioned the Texas Commissioner of Insurance for a waiver of the insurance purchase requirement pursuant to 44 CFR §206.252(d) stating, “At this time, TPWD’s request is not based upon unavailability; it is based on public policy considerations”. On November 28, 2006, the Texas Commissioner of Insurance, Mike Geeslin, provided the waiver. In his letter of January 31, 2007, the Regional Director (now Regional Administrator) denied the Insurance Commissioner’s waiver.

The Applicant waived the first appeal and submitted a second appeal to the Division of Emergency Management (DEM) on March 27, 2007. DEM forwarded the appeal to FEMA on May 30, 2007. The Applicant requested that FEMA accept the Texas Commissioner of Insurance’s certification that insurance coverage in the amounts necessary is not reasonably available.

Issues: (1) Is the Texas Commissioner of Insurance’s certification that the flood and wind insurance required was not reasonable for the Applicant appropriate?
Findings: (1) No. Insurance is available under the NFIP and the Texas Windstorm Insurance Association.
Rationale: Section 311 of the Stafford Act, 44 CFR §§ 59.2(a), 206.252(d), and 206.253(c).

Appeal Letter

February 21, 2008

Mr. Philip Anders
Alternate State Coordinating Officer
Office of the Governor
Division of Emergency Management
Hurricane COP
5425 Polk Street, Suite 470
Houston, Texas 77023

Re: Second Appeal – Texas Parks and Wildlife Department, PA ID 000-U00FB-00
Insurance Waiver, FEMA-1606-DR-TX

Dear Mr. Anders:

This is in response to your letter dated May 30, 2007, which transmitted the referenced second appeal on behalf of the Texas Parks and Wildlife Department (Applicant). The Applicant is appealing the Department of Homeland Security’s Federal Emergency Management Agency’s (FEMA) rejection of the Texas Commissioner of Insurance’s certification that insurance is not reasonably available for the Applicant’s damaged facilities.

High winds, extensive rainfall, flooding, and storm surge associated with Hurricane Rita (September 23, 2005) severely damaged several of the Applicant’s facilities. The Applicant requested assistance from FEMA to repair the damages. Public Assistance Program regulations require applicants to purchase insurance as a condition of receiving assistance. However, pursuant to section 311 of the Stafford Act, the requirement to purchase insurance is waived if the State insurance commissioner certifies that the type and extent of required insurance is not reasonably available. The Applicant petitioned the Texas Commissioner of Insurance for a certification that insurance for its facilities was not reasonable. In its letter to the Texas Commissioner of Insurance, the Applicant stated, “At this time, TPWD’s request is not based upon unavailability; it is based on public policy considerations.” In a letter dated
November 28, 2006, to the FEMA Regional Director (now Regional Administrator), the Texas Commissioner of Insurance certified that the type, amount and extent of insurance required for the Applicant’s facilities were not reasonable.
In a letter to the Texas Commissioner of Insurance dated January 31, 2007, the Regional Director requested that the Texas Commissioner of Insurance document that the required insurance was not available from the National Flood Insurance Program (NFIP) and the Texas Windstorm Insurance Association (TWIA) in order to grant the waiver. He stated that flood insurance was available at reasonable premiums from the NFIP and that TWIA was established specifically to
provide reasonable wind insurance throughout Texas. The Texas Commissioner of Insurance did not provide the requested documentation.
Since the Regional Director responded to the Texas Commissioner of Insurance’s letter, the Applicant submitted a second appeal to the Division of Emergency Management on March 27, 2007, requesting that FEMA accept the Texas Commissioner of Insurance’s certification, thereby eliminating the requirement that the Applicant purchase insurance on its damaged facilities. Further, the Applicant states, “We find no authority under Federal or State law for a FEMA official to overrule the certification of the Texas Insurance Commissioner that certain insurance requirements are not reasonable.”
Section 311 of the Stafford Act requires applicants who receive assistance under section 406 to obtain and maintain insurance in the amount of eligible damage to the facilities. Additionally, section 311(a)(2) states, “In making a determination with respect to availability, adequacy, and necessity under paragraph (1), the President shall not require greater types and extent of insurance than are certified to him as reasonable by the appropriate State insurance commissioner responsible for regulation of such insurance.” It is clear that the Applicant does not dispute that insurance is reasonably available for its facilities. In its letter to the Texas Commissioner of Insurance, the Applicant states, “At this time, TPWD’s request is not based on unavailability; it is based on public policy considerations.” The Applicant’s request is not consistent with the intent of section 311 of the Stafford Act. Congress created the NFIP to provide flood insurance at reasonable rates throughout the country. Therefore, an insurance commissioner cannot certify that flood insurance is not available at a reasonable cost. In addition, TWIA was established specifically to provide reasonable wind insurance in Texas. Based on review of all information submitted with the appeal, I have determined that the Regional Administrator’s decision on this matter is consistent with program statute and regulations. Therefore, I am denying the second appeal.
Please inform the Applicant of my decision. My determination constitutes the final decision on this matter as set forth in 44 CFR §206.206.

Sincerely,
/s/
Carlos J. Castillo
Assistant Administrator
Disaster Assistance Directorate

cc: William Peterson
Regional Administrator
FEMA Region VI