December 3, 2018

Concrete group gets full $20M

HBJ PHOTO | Bill Morgan
HBJ PHOTO | Bill Morgan
South Windsor homeowner Kristen Cole is one of thousands who have problems with cracked foundations they claim was due to tainted cement from a defunct supplier.
PHOTO | Connecticut Department of Housing
Towns identified as having been impacted by crumbling foundations.

The nonprofit insurance company assisting homeowners with funding for crumbling concrete foundations has received the full $20 million from the state as promised, the first of five scheduled installments.

Michael Maglaras, superintendent of the Connecticut Foundation Solutions Indemnity Co., said Friday that the remaining $20 million in bonding that had been held up due to procedural steps at the Department of Housing were transferred to the company Thursday.

"We'll have no difficulty using those funds right away," he said.

Following the company's board of directors meeting Tuesday, when members reviewed hundreds of comments from affected homeowners, the company now is in the process of revising its underwriting and claims management process to assist as many homeowners as possible, Maglaras said.

The new guidelines will be posted on the company's website likely sometime between Dec. 4 and Dec. 10, he said.

A statutorily required 30-day waiting period must be completed after the public is notified of the changes, meaning the company will begin accepting applications for funding in January.

Maglaras would not comment on the specific changes until they are finalized and up on the website, but did say that many of the changes will improve the process and are designed to help more people.

"It's the kind of delay that is going to result in a better process and a more equitable disbursement of funds," he said.

The first round of state funding received Thursday comes after Maglaras said last month that the company would have to shut down if the funds weren't transferred promptly.

All employees, including Maglaras, accountants, and actuaries, are outsourced and the company already was in default on some of its contracts when Maglaras testified in front of a joint legislative committee meeting.

"I had to send the message I had to send," he said Friday, adding that his testimony was "a call to action" that resulted in strong cooperation among state agencies to ensure the money was transferred quickly.

"I said what I said because I was coming within days of having to fire people," Maglaras said. "That's a fact."

Maglaras is anxious to adjust the first 50 claims to instill confidence in the company's ability to fix foundations and reimburse those who already have paid for the work.

"What's really important is stop blowing smoke at homeowners, stop promising what we can't deliver," he said.

Maglaras expects future bonding dollars to be delivered in a more timely fashion, but the State Bond Commission is not expected to meet again until the new administration is in office.

The funds received Thursday were the allocation for last fiscal year, which ended June 30, and Maglaras said this fiscal year's allocation must come quickly because he will certainly be out of money before June 30, 2019.

Once their applications are accepted, homeowners are urged to file online for quicker results, but homeowners can drive to Simsbury to file in person if they require assistance with their applications.

Maglaras stressed that it was not him, but the legislation itself, that excludes condominiums with more than four units from coverage. He noted that legislators intend to tweak that language in the upcoming session.

He also is reminding homeowners that they do not need to submit their two contractor bids with their application. They will be contacted about the contractors after their applications are filed, he said.

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