Day: September 21, 2008

Cat has insurance industry's tongue about "convergence" of Bailout and reauthorization of NFIP

One glance at the feed from the National Underwriter – Frank seeks to extend NFIP, Industry opposed– was all it took for me to start digging through my notes for Like a cat chasing its tail until I found the article.

Convergence is a topic that continues to gain attention within the insurance industry. It seems that articles for the last 25 to 30 years noted with interest the inevitability of the insurance market and the capital market combining.

I don’t recall reading a word about this convergence in anything about the Bailout; but, clearly there was insurance money in the subprime market. In addition to that we reported in Another Massive Reinsurance Failure (January 2008), we’ve also discussed Allstate’s approximately $4.8 billion investment in subprime mortgage securities. An an article I found tonight said:

The $4.8 billion is approximately equal to all of 2006 earnings…The holdings are approximately 22% of Allstate’s equity.

That looks pretty “convergent” to me and, in an entirely different way, so does the industry’s position on the temporary extension of the NFIP proposed by Senator Frank and opposition to expanding the program to include wind damage as proposed in HR3121. Continue reading “Cat has insurance industry's tongue about "convergence" of Bailout and reauthorization of NFIP”

Cat has insurance industry’s tongue about “convergence” of Bailout and reauthorization of NFIP

One glance at the feed from the National Underwriter – Frank seeks to extend NFIP, Industry opposed– was all it took for me to start digging through my notes for Like a cat chasing its tail until I found the article.

Convergence is a topic that continues to gain attention within the insurance industry. It seems that articles for the last 25 to 30 years noted with interest the inevitability of the insurance market and the capital market combining.

I don’t recall reading a word about this convergence in anything about the Bailout; but, clearly there was insurance money in the subprime market. In addition to that we reported in Another Massive Reinsurance Failure (January 2008), we’ve also discussed Allstate’s approximately $4.8 billion investment in subprime mortgage securities. An an article I found tonight said:

The $4.8 billion is approximately equal to all of 2006 earnings…The holdings are approximately 22% of Allstate’s equity.

That looks pretty “convergent” to me and, in an entirely different way, so does the industry’s position on the temporary extension of the NFIP proposed by Senator Frank and opposition to expanding the program to include wind damage as proposed in HR3121. Continue reading “Cat has insurance industry’s tongue about “convergence” of Bailout and reauthorization of NFIP”

Bailout on Capitol (blueberry) Hill

U.S. bailout plan calms markets, but struggle looms over details– and it should!  Get a load of this detail – Section 8 of the draft proposal.

Decisions by the Secretary pursuant to the authority of this Act are non-reviewable and committed to agency discretion, and may not be reviewed by any court of law or any administrative agency.

I don’t pretend to have Sop’s insight on the bailout proposal, but it doesn’t take a knowledge of finance to recognize a bullshit idea – and Section 8 is complete and total bullshit, not the only pile, either, just the biggest

I found another by first reading NYT’s Q & A on the draft proposal –

The recovery package cannot go higher than $700 billion without additional legislation. As for that figure, it lies between the optimistic estimate of $500 billion and the pessimistic guess of $1 trillion about the cost of fixing the financial mess. But the $700 billion is in addition to an $85 billion agreement on a bailout of the insurance giant American International Group, plus $29 billion in support that the government pledged in the marriage of Bear Stearns and JPMorgan Chase. On top of all that, the Congressional Budget Office says the federal bailout of the mortgage finance companies Fannie Mae and Freddie Mac could cost $25 billion. Continue reading “Bailout on Capitol (blueberry) Hill”

Is Gilbert Randolph New to the Wind-Water Game? Not by a Long Shot: Bill Quigley Welcome to Slabbed

It was a small world until the Internet made it even smaller. A reader gave us a heads up to some testimony given the US House of Representatives Financial Services Committee’s Subcommittees on Oversight and Investigations in February 2007 telling us the answer to something we were then pondering privately: Bill Quigley’s connection to Hurricane Katrina insurance issues in Mississippi. The bonus for us was the association with Gilbert Randolph, the new counsel for whistle blowers Cori and Kerri Rigsby in Ex Rel Rigsby.

Bill Quigley is a name very familiar to me here in south Mississippi because we get the New Orleans television news broadcasts. He is a law professor at Loyola University in New Orleans who is in the news on occasion in his capacity as director of the Gillis Long Poverty Law Center at Loyola.

For our readers that aren’t from here I’ll add the Loyola University College of Law isn’t an educational backwater either, claiming notable alums such as current Louisiana Supreme Court Chief Justice Pascal Calogero, former Jefferson Parish  Sheriff Harry Lee and current Louisiana Lieutenant Governor Mitch Landrieu among many others.

Mr Quigley’s association with Gilbert Randolph comes in the form of joint testimony given to the U.S. House of Representatives in early 2007, Mr Quiqley on behalf of the Gillis Long Poverty Law Center and Gilbert Randolph on behalf of the Mississippi Center for Justice. As the link indicates this, non profit public interest group currently focuses on several issues issues spawned by Katrina’s aftermath. Although the Mississippi Center for Justice has only been around since 2002 they list some high profile accomplishments in children’s issues such as: