State of Louisiana Makes Repeated Requests to BP with No Action from BP
BATON ROUGE (June 4, 2010) - The Louisiana Department of Social Services (DSS) and Louisiana Workforce Commission (LWC), along with the Louisiana Attorney General's office, are requesting that BP allow the state access to the oil giant's claims database and procedures for approving or denying claims, paying claimants and closing cases related to the Gulf of Mexico oil spill.
DSS and LWC have already made repeated requests, but BP still has failed to share its process for considering claims made by individuals and businesses. In the latest response to the repeated requests, BP Managing Attorney Mark Holstein again denied to provide the material stating in a June 2 letter that while the state's requests are "undoubtedly made in good faith, they risk distracting our team from the very important goal of handling claims."
"I'm concerned about reports from citizens and parish officials that many people have not been paid by BP, or have only received an initial payment of $5,000 or less," said DSS Secretary Kristy Nichols. "More than 40 days into this disaster, people's livelihoods are on indefinite hold, it is becoming harder to support their families and some even face eviction from their homes. Immediate assistance from BP is critical."
Additionally, for many individuals and businesses that have received initial payments, many report that they have not been informed about how they will receive additional payments.
LWC Executive Director Curt Eysink added, "Hardworking people should not be forced into poverty by the oil spill. We need to understand why so many claims have not been paid, some for many weeks. We also want to make sure that people who have lost their jobs because of the spill get the first opportunity at the jobs that are being created from clean up and oil spill response efforts. Knowing who has filed lost income claims with BP will help us ensure people are getting the help they need."
DSS and LWC are also conferring with Louisiana's Commissioner of Insurance Jim Donelon, who has formed an internal committee to guide their oversight of the third party administrators overseeing and analyzing BP's claims process.
Donelon said, "I have created a committee of our senior leadership to coordinate what I believe will be many years of consumer protection as we make our way through this catastrophe. Today, I sent personnel to observe the sites where claims are being processed on behalf of BP. Following their report, I will coordinate with the Governor's office and the Attorney General's office on what steps need to be taken immediately."
Based on limited information provided by BP, the state believes the largest amount requested by individuals is compensation for loss of income. The information obtained by the state shows that the total is $9.1 million, based on data received on May 29. However, more than half of those claims have not yet been processed. Of 7,469 claims filed by individuals and businesses for loss of income, BP has paid just 3,438 claims; 54 percent, or 4,031 claims, were pending.
As of May 29, only $22.5 million had been paid on 6,997 claims; 51 percent remain pending, at least one for as long as 33 days. The majority of paid claims are property damage; only one of 118 bodily injury claims has been paid.
"Without more detailed data about the status of these claims, where they are in the claims process and why they have not been resolved, it is difficult to get a clear analysis of the current claims situation, including how many people have been paid for more than one month and if any people are submitting multiple claims," said Nichols.
Of 37 claims categories ranging from Loss of Income for shrimpers, crabbers, oyster processors and fishermen to loss of rental property income and damage to animals and property, 26 categories have 70 percent or more of unpaid claims. In 17 business categories, 71 percent of claims are still pending. For commercial loss of income, 57 percent of claims are unpaid. Less than 25 percent of business interruption claims have been paid.
Eysink said, "Many businesses already have begun to close or are teetering on the edge of having to close because of the oil spill. BP committed to paying them enough to stay open and keep their employees on the payroll, but that is not happening. BP needs to live up to its commitments that it will pay for the losses that result from the spill."
Nichols concluded, "The longer it takes for claims to be paid, in many cases, means the longer that families must wait to fill their pantries, pay the rent or mortgage, fill gas tanks and pay utility bills," said Nichols. "The state has done everything in its power, from mobile outreach centers where citizens can access information on employment, food stamps and other resources, to teaming with non-profits to provide immediate aid like food and household commodities. Now it is BP's turn to step up and allow the state to ensure that its citizens can support themselves by releasing vital information to ensure folks are being adequately taken care of in their claims process."