Two government agencies investigating the handling of flood damage claims in the aftermath of the 2005 storm season offered stern criticism of both the insurance industry and the Federal Emergency Management Agency at a hearing on Capitol Hill yesterday.

The negative comments came at a joint hearing of the Oversight and Investigations Subcommittees of the House Financial Services and Homeland Security Committees.

A main concern was that insurers operating under the Write-Your-Own aspect of the National Flood Insurance Program could have pressured adjusters to determine claims were the result of flooding, ignoring wind damage for which insurers could be held responsible.

This would unfairly put the burden of claims on the NFIP, and ultimately the taxpayers. A class action whistleblower suit unsealed last week, which was filed by a group of adjusters in New Orleans, claimed this sort of shifting had taken place.

Witnesses at the hearing, representing the Government Accountability Office and the Inspector General's Office at the Department of Homeland Security, said their investigations had been hampered somewhat by a lack of information in FEMA files and reluctance on the part of insurers to turn over their own information.

The Inspector General's Office investigated the issue after a request by former Financial Services Committee Chairman Rep. Mike Oxley, R-Ohio, while the mandate for the GAO study was inserted last year in Homeland Security appropriations legislation by Sen. Trent Lott, R-Miss.

Sen. Lott sued and then settled with his insurer over his claims for the destruction of his coastal home by Hurricane Katrina.

As of now, neither congressional study has found any wrongdoing on the part of the industry, although no final conclusions have been reached.

"Although nothing came to our attention during our limited review to indicate that WYOs [write your owns] attributed wind damage to flooding," said Matt Jadacki, deputy inspector general for disaster assistance oversight at the Dept. of Homeland Security, "we cannot rule out the possibility that it occurred."

Much of the problem, said Mr. Jadacki, was that FEMA's files on flood claims generally provided information on the flood aspects of a claim but not the corroborating information on any wind damages that may have been determined. "When we finished our work" with the NFIP's files, he said, "it just wasn't there."

While FEMA did conduct audits of adjudicated claims, Mr. Jadacki said the inspector general's investigation found that these were typically more administrative in nature and would not have challenged the original assessment of wind versus water damage. "I believe they used a 'checklist' approach," he said.

Orice Williams, director of financial markets and community investment for the GAO, said that her agency had a similar experience. Additionally, she said, FEMA required that any information provided to the GAO be approved first by FEMA officials.

The GAO, she said, spoke with the National Association of Insurance Commissioners and with some individual state insurance commissioners, but they were unable to provide information that was specific enough to gauge against the NFIP claims information.

Insurance companies, she added, "were generally unwilling to meet with us."

In speaking at the hearing, some members sought to ensure that the findings that abuses may have occurred should not be taken as proof of guilt.

"If this is true, it is an outrage," said Rep. Gary Miller, R-Calif.

However, he noted that "there is a difference between the potential for wrongdoing and the finding of actual wrongdoing," and advised that the committee take a "cautious" track.

Others had a different attitude. Rep. Gene Taylor, R-Miss., who appeared at the hearing as a guest of the committees because he does not serve on either, and who also sat in on a similar hearing earlier in the day focused on NFIP reform legislation and flood mapping, pointed to accounts of fraudulent claims in Mississippi and New Orleans newspapers.

He also suggested that the assignment of claims to the flood program may have been the result of comments made to industry leaders by David Maurstad, who oversees the NFIP for FEMA.

At both hearings, Rep. Taylor asked for subpoenas to be issued for information regarding comments made by Mr. Maurstad at a meeting with members of the insurance industry on September 7, 2005 in which he referenced prior conference calls with the heads of some insurance companies.

Like Sen. Lott, Rep. Taylor filed a suit against his insurer over a Hurricane Katrina claim.

Rep. Christopher Carney, D-Penn., who chairs the Homeland Security Subcommittee, said he had directed his staff to look further into that meeting and Mr. Maurstad's comments.