ARSON HAS BECOME HIGHLY PROFITABLE IN MANY METROPOLITAN AREAS; LANDLORDS PROFIT FROM INSURANCE CLAIMS FOR BURNED, DETERIORATED BUILDINGS, AND FIRES CAUSE PROPERTY VALUES TO FALL, BENEFITING THE SPECULATOR AND ROBBING CITIES OF TAX REVENUES. ARSON FIRES NOT ONLY CAUSE IMMENSE ECONOMIC DAMAGES, BUT ALSO BRING INJURIES, DISLOCATION, AND FINANCIAL RUIN TO THOUSANDS OF FAMILIES, PARTICULARLY IN URBAN AREAS. TESTIMONY FROM PROFESSIONAL ARSONISTS DEMONSTRATES A TOTAL LACK OF CONCERN ABOUT APPREHENSION AND THE ENORMOUS FINANCIAL GAINS THAT CAN BE MADE. ARSON IS FREQUENTLY COMMITTED BY SOPHISTICATED ORGANIZATIONS MAKING DETECTION AND PROSECUTION DIFFICULT. INSURANCE COMPANIES PROVIDE INCENTIVES FOR ARSON AND SHOULD MONITOR AGENTS CAREFULLY, INSPECT ALL INSURED PROPERTIES, AND IMPROVE CLAIMS INVESTIGATIONS. LOCAL AND STATE LAW ENFORCEMENT AGENCIES HAVE THE PRIMARY RESPONSIBILITY FOR SUSPECTED ARSON CASES, BUT FACE MANY PROBLEMS INCLUDING ORGANIZED CRIME ACTIVITY IN ARSON AND LACK OF SCIENTIFIC EXPERTISE FOR DETECTING ARSON BY THE POLICE AND FIRE DEPARTMENTS. THE FBI, THE INTERNAL REVENUE SERVICE, THE U.S. POSTAL SERVICE, AND THE BUREAU OF ALCOHOL, TOBACCO, AND FIREARMS CAN PURSUE ARSON INVESTIGATIONS IF THEY RELATE TO CRIMES WITHIN THEIR JURISDICTION, BUT ONLY THE LATTER TWO AGENCIES HAVE SHOWN ANY INTEREST IN SUCH CASES. THE FEDERAL INSURANCE ADMINISTRATION (FIA) WHICH OVERSEES THE STATE-RUN FAIR ACCESS TO INSURANCE REQUIREMENTS PLANS (FAIR) IS AWARE THAT THIS PROGRAM MAY ENCOURAGE ARSON AND HAS TAKEN TENTATIVE STEPS TO RESTRUCTURE ITS POLICIES. WITH THE CRIME OF ARSON OUT OF CONTROL AND LAW ENFORCEMENT EFFORTS FRAGMENTED, RECOMMENDATIONS MUST POINT TO A MORE ACTIVE FEDERAL ROLE IN ARSON INVESTIGATIONS, THE ESTABLISHMENT OF AN INTERAGENCY COMMITTEE TO IMPROVE COORDINATION, AND SUPPORT FOR MAKING ARSON A CLASS I CRIME. THE APPENDIXES CONTAIN CORRESPONDENCE BETWEEN THE COMMITTEE, THE FIA, AND HUD CONCERNING THE FAIR PROGRAM. (MJM)