Second Circuit Finds SMJ Over Claims against WYO Companies under National Flood Insurance Act
Per Palmieri v. Allstate Ins. Co, --- F.3d ----, 2006 WL 957252 (2d Cir. Apr. 13, 2006):
This contract dispute over a flood insurance policy requires us to determine whether we have jurisdiction to hear claims involving policies issued by private insurers pursuant to the National Flood Insurance Act (“NFIA” or the “Act”), codified at 42 U.S.C. §§ 4001-4129. We hold that 42 U.S.C. § 4072 gives us jurisdiction to hear such claims. . .
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Pursuant to 42 U.S.C. § 4081(a), FEMA created the Write-Your-Own Program (“WYOP”), which allows private insurers, sometimes called “WYO companies,” to issue and administer flood-risk policies under the Government Program. Although FEMA may issue policies directly under the Government Program,more than 90% are written by WYO companies. These private insurers may act as ‘fiscal agents of the United States. . . .
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Section § 4072 states that when “the program is carried out as provided in [42 U.S.C. § 4071], the Director [of Federal Emergency Management Agency (FEMA)] shall be authorized to adjust and make payment of any claims for proved and approved losses covered by flood insurance.” The statute includes the following jurisdictional language:
[U]pon the disallowance by the Director of any such claim, or upon the refusal of the claimant to accept the amount allowed upon any such claim, the claimant, within one year after the date of mailing of notice of disallowance or partial disallowance by the Director, may institute an action against the Director on such claim in the United States district court . . . .
Id. This case requires us to determine whether an action against the Director's fiscal agent [i.e. WYO companies] is “an action against the Director” under § 4072.
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[W]e join the Third and Sixth Circuits in holding that § 4072 gives rise to jurisdiction over claims against WYO companies.