Following the approval of $20 million in new funds from the state Bonding Commission, the captive insurance company charged with funding repairs to the state’s hundreds of crumbling foundations is back in business.
The commission approved the funds Tuesday to recapitalize the fund through the end of fiscal year 2020; however, the Connecticut Foundation Solutions Indemnity Co. said in a statement that the money would likely be insufficient to cover claims through June 30, 2020. The company stated it had requested $60 million from the commission.
To date, 1,196 homeowners and condominium associations have filed claims with CFSIC; only 247 have so far had their claims granted and around 150 homeowners with foundations damaged by the iron sulfide pyrrhotite will be back in their homes by this time next year. CFSIC has paid out $14.1 million of the $100.1 million in active claim liabilities it has so far. The new funds will cover at least the next 61 claimants in line, the company said in its statement, but after that point agreements with the remaining homeowners in line will be rationed out at two per week to keep the fund solvent for the next nine months.
“All of us who work on the CFSIC project understand clearly that our robust claim application process has greatly accelerated the identification of claimants in need. We make no excuses for our success. We all signed on to a project with the understanding that CFSIC would only get annual Bond Commission allotments of $20 million, regardless of how fast we were moving. No one within the CFSIC system is pretending otherwise,” the company’s statement reads. “However, we have urgently asked state government, based on the facts in our annual report and our outstanding success at identifying citizens affected by this natural disaster, to reconsider the timing of which they give us what they give us. We have made our case. We hope for the best.”
The company had said on Sept. 3 it would stop accepting new applications as of 5 p.m. on Sept. 6, at which point the booked value of known and verifiable claim liabilities on its balance sheet will hit $121.6 million. CFSIC has only been scheduled to receive $125.5 million from the state between now and June 30, 2022, when the company will be wound down under the terms of the legislation that created it. Industry watchers expect the number of homeowners suffering pyrrhotite damage to their foundations who come forward will continue to grow for some time.
