In response, FEMA today announced that to expedite claims, it has authorized additional flexibility for the Write-Your-Own companies "to quickly make advance and partial payments."

A FEMA spokesperson tells PC360 that the agency has also reduced paperwork requirements so that claims under NFIP policies can be processed "as quickly as possible."

The spokesman says, "Of the more than 141,000 claims that have been filed, more than 60 percent have been closed and approximately $4.1 billion has been paid out to survivors."

That is inconsistent with the Christie and Schumer comments.

At a press conference Feb. 5, Christie called out the federal agency, saying the NFIP has "stunk" because of its delay in handling of claims and the subsequent settling of those claims.

In a letter to the state congressional delegation the same day, Christie said that, while more than 85 percent of homeowners-insurance claims have been closed, only 30 percent of flood claims have been closed.

Schumer said in his statement that FEMA "must demand vastly improved performance from the insurance companies that run the NFIP," and that if the companies don't improve, FEMA "should fine them or end their contracts."

The back-office work for Write-Your-Own insurance companies is handled by National Flood Services, out of Kalispell, Mont. FEMA-related claims, through what is known as FEMA-direct, are handled by CSC Corp., formerly known as Computer Sciences Corp., based in Falls Church, Va.

CSC in June 2011 won the contract to handle the more than 800,000 flood policies turned back to FEMA by State Farm after the insurer grew tired of the fits and starts associated with Congressional renewal of the NFIP, a process which went on from 2007 until July 2012.

Both NFS and CSC referred all calls to FEMA.

In his statement Tuesday, Schumer said, "These companies take on no additional risk by participating in the NFIP—their expenses are reimbursed by FEMA—and they profit from generous fees that can add up to as much as one-third or two-thirds of all premiums collected on NFIP policies in a given year."

He added, "FEMA must immediately require far better performance and quicker payouts from these companies," and said FEMA should consider requiring them to hire more claims adjusters and inspectors

However, there may be as many as one million policies (of the 5.6 million policies countrywide) that are administered directly by FEMA/NFIP and the losses are settled by them. Industry sources have stated that since the companies that are part of the WYO program are actually drawing upon federal government funds, the companies must follow very specific protocols established by FEMA/NFIP in order to make sure they are reimbursed for the claim, if there is a difference, the WYO company that settled the claim may take the haircut.

The WYO insurers' (that help administer this federal government program in partnership with FEMA/NFIP) top priority is to provide assistance to those in need as quickly as possible, while also meeting the  requirements of the progam under the law.

Jimi Grande, senior vice president of Federal and Political Affairs for the National Association of Mutual Insurance Companies, added that "NAMIC is currently working with our members to determine the exact nature of the problems within the NFIP claims system, and what if anything we can propose to fix them. After years of neglect from Congress, significant NFIP reforms were passed last year that will help the program develop the resources it needs to provide better and more efficient services. It is important to remember, though, that the NFIP provides a vital services and coverage that would likely not be available otherwise, as was the case prior to its creation in 1968."

In defending itself, the FEMA spokesperson says the agency's top priority "is to provide assistance to those in need as quickly as possible, while also meeting our requirements under the law."

To do this, the spokesman says FEMA must work with its WYO-company partners that sell flood insurance under their own names and are responsible for the adjustment of their policyholders' claims.

"FEMA will not be satisfied until policyholders have received payments for all covered losses," the spokesman says.

"Policyholders who continue to have concerns with their insurance companies should reach out directly to FEMA by calling 1-800-427-4661," the spokesman adds.