Posted on February 12, 2010 by Chip Merlin

Amy Bach and United Policyholders Supports Mississippi Insurance Protections

Amy Bach and others with United Policyholders provide a longtime and steadfast consumer protection organization devoted solely to the interests of policyholders. With extensive experience and appreciation of how much legislation can impact insurance coverage and claims, Bach provides a unique perspective with expertise on a national level concerning insurance policy and insurance regulation. Policyholders need more Amy Bachs to counteract the extraordinary coordinated efforts by insurers to make laws and regulations one sided in the insurers favor.

In a letter to Mississippi Insurance Commissioner Chaney, Amy Bach calls on him to support policyholders in Mississippi with regulations demanding that insurers sell and service the insurance product so that full and prompt indemnity is accomplished. Here is what she calling on Chaney to do:

I’m writing to encourage you to lend your support to a legislative measure that passed out of the Mississippi House of Representatives earlier this week. My understanding is that the bill has been amended to address concerns you raised to the sponsor. The bill will strengthen legal protections for insured property owners in your state, and we hope your office will help get it enacted. You know all too well about the problems people have experienced in getting paid on their hurricane damage claims due to confusing legalese in property policies and unanticipated exclusions.

I am certain many may think these efforts are a waste of time because the insurance lobby in Mississippi seems to be in control of the political process. Standing up for the right principle and social policy is always the right thing to do. Like water in a stream relentlessly influencing the earth, just social policy reflected in law will eventually happen. But this will occur only so long as we stand up to those with more significant wealth or power that are attempting to keep the unjust status quo in place.

My hat is off to everybody who stands with Amy Bach and does something, however seemingly slight or unimportant, to help even the playing field for policyholders. In the long run, these efforts will prevail and be reflected in rules for accountability for the greater benefit of all.
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Posted on February 22, 2009 by Chip Merlin

Mississippi Anticoncurrent Causation Language Is Dead

Mississippi State Senator David Baria admitted that his proposed legislative bill of rights for policyholders is "dead." Mississippi S.B. 2196 would have eliminated anticoncurrent causation exclusionary language from property insurance policies. The Mississippi Senate Insurance Committee failed to act on the bill, thereby killing any attempt to enact a bill of rights.

Unlike other states, the insurance industry dominates Mississippi's Republican party. Accordingly, I was not surprised when the Mississippi Senate killed the bill. Until the Mississippi Republican party frees itself of the very anti-consumer mind set of insurance industry lobbyists or Mississippi changes the balance of power back to the Democratic party, it will be very difficult to achieve meaningful insurance reform there.

Mississippi Insurance Commissioner, Mike Chaney, has his own regulatory version, which is supported by the insurance industry. Julie Pulliam, the director of public affairs (a lobbyist manager) for the American Insurance Association thinks Chaney's "Policyholder Bill of Rights" strikes the right balance. The one thing I have learned from going head to head in politics with the insurance industry is if they think something is the "right balance," then it is bad for policyholders.

It appears that the insurance lobby may have a friend in Mike Chaney. It is obvious they have strong allies with the Mississippi Legislature. It is a shame that some of the nicest people and many lifelong friends have leaders so committed to helping an industry forcefully against their long term economic interests. It makes little common sense. But again, that's politics.

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Posted on December 26, 2008 by Chip Merlin

Moving From Insurance Regulator Of State Farm To State Farm's Counsel

I met Ralph Nader in San Diego about a decade ago. He remarked that a major problem with Departments of Insurance is that most have a revolving door to and from the insurance companies they supposedly regulate. Nader implied that unless laws prevent insurance companies, their vendors and law firms from hiring those who supposedly regulate their activities, actual regulation that supports consumers will not exist. The practice of insurers hiring former employees of Departments of Insurance must stop in order to accomplish honest regulation without an appearance of a conflict of interest.

The revolving door is working for at least one employee of the Department of Insurance in Mississippi. Anita Lee, of the Sun Herald, recently reported that the deputy insurance commissioner who "oversaw" the Mississippi Insurance Department's Market Conduct Study of State Farm following Hurricane Katrina has left the Mississippi Department of Insurance. Guess who hired him? The lawyers who represent State Farm in Hurricane Katrina matters.

Given this, you do not need to be a psychic to guess how well State Farm did in the Study. I noted the serious problems with the Mississippi Insurance Department study in a previous blog. In an article published in the Sun Herald, a noted consumer advocate wrote that State Farm could have written the report itself. Only legislation which prevents those regulated from hiring, directly or indirectly, those who recently regulated them can prevent this kind of conflict of interest.
 

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Posted on November 2, 2008 by Chip Merlin

Mississippi Insurance Department Finds State Farm Wrongdoing But Not With Evil Intent

The Mississippi Department of Insurance finally issued its report regarding State Farm's claims handling following Hurricane Katrina. The findings were long and will undoubtedly be subject to criticism and interpretation. I am certain State Farm publicists will try to undermine the Rigsby sisters' claims even more since the report essentially concluded that their assertions were unsubstantiated. State Farm will also point to the findings that no penalties were warranted. Those same State Farm publicists will NOT point out that the investigation found State Farm employees were not forthright in their interviews. State Farm attorneys will certainly not tell judges or others that State Farm employees had various and contradictory explanations as to what the anti-concurrent language means and how it worked in the adjustment of claims in Mississippi.

It has always seemed strange to me that conservative judges, insurance company lawyers, and the insurance industry can claim that the anti-concurrent language is not ambiguous when trained adjusters cannot agree as to the meaning of the clause. Those same adjusters make decisions on claims in different ways because of the ambiguity of the meaning applied to the facts of the loss. In Leonard v. Nationwide, Judge Senter found the clause ambiguous enough to afford coverage. This report helps prove he was right, and the appellate judges wrong. Ambiguity is typically proven through a standard as to whether a "lay person" or "reasonable" person could read an insurance policy in more than one way. If so, the clause will be ruled ambiguous, and the meaning in favor of the policyholder will be given.

Is there any better proof of ambiguity than the insurance company's own adjusters giving different interpretations, some of which favor the policyholder? The Mississippi Supreme Court has a case pending before it and should take this into consideration. Maybe there is some hope for policyholders on this issue and some good will come from the report. I cursed and almost jumped out of my chair when the report indicated that the Department asked for information from policyholder attorneys. I was never asked.

Our firm had approximately 200 State Farm cases, with many of those litigated and testimony taken. While the Attorney General's office contacted us and other policyholder attorneys, I don't know any policyholder attorneys who were contacted by the Mississippi Insurance Department. In the end, after finding problems and criticizing State Farm for its claims actions, the Mississippi Insurance Department somehow found that no unfair claims practices were violated. I was surprised by this finding. In her story in the Sun-Herald, Ms. Lee quoted the very capable Gulfport trial attorney, Joe Sam Owens, "If I didn't know he was the Commissioner of Insurance, I would have thought he worked for State Farm." Amen.
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