Day: October 23, 2008

Texas talking – the latest from both sides of its mouth

Given the talk from Texas, I’m wondering when the Texas Insurance Department will issue one of its consumer protection policy bulletins on the Texas Windstorm Insurance Association – but, before I go there, let’s start with this incredible post-Ike insurance story from Chip Merlin.

My new client was born and raised in Houston. He started his own company ten years ago after working in construction for 25 years.  His roof was damaged and water entered the attic causing damage to the insulation and then more damage as the water dripped down into the rest of the structure.

However, the insurance adjuster found that the windows leaked and allowed for the water damage.  That cause of loss would be excluded under my clients commercial policy.  After a fist fight almost ensued between my client and the adjuster, the adjuster agreed to hire an engineering firm.  Texas Wind hired a well known insurance engineering vendor and sure enough, that engineer somehow opined that lower floor windows had water leaked and water defied gravity, finding its way into the attic. Is such a finding a “reasonable” basis?  Doubtful. (emphasis mine)

Situations such as that are so insulting as anyone with modest intelligence can tell it’s a total crock of you-know-what – and a Texas-sized one at that.  What I want to know is how  engineers that put out the crap can hold a license and the same goes for the insurers that accept their reports.  It’s way past time for the licensing issue to be addressed IMO.

Merlin doesn’t raise the licensing issue per se; but, I imagine he’s given it some thought as he’s got ample cause; and, no doubt, knows a lot more stories that, thus far, he’s not telling. Continue reading “Texas talking – the latest from both sides of its mouth”

A "fall" festival? Draper sentencing set in beef plant fiasco set for Halloween

James Draper was such a minor player in the beef plant case that I doubt few even know his name; yet, of all the folks involved, Draper is the one facing the longest sentence – and, if the government gets what it wants, his sentence will be even longer after the Halloween Day hearing. The Clarion-Ledger ran a brief update in today’s paper. h/t Phunk and Wagnalls

James Draper, convicted by a jury for his part in the Mississippi Beef Plant scandal, will be sentenced on Oct. 31. The government is asking Chief Judge Michael Mills to deal more harshly with Draper, a refrigerator salesman from Tennessee, than a pre-sentence report recommends.

Draper was convicted July 23 on two counts — aiding and abetting the interstate transportation of money obtained by fraud, and of money laundering — in bilking the state out of $187,725. The government filed a four-page motion Tuesday urging Mills to consider that Draper lied during his two-day trial in U.S. District Court.

Based on the charges against him, it would seem Draper had no information to trade for a lighter sentence – but there’s more to the story of this puzzling aspect of the beef plant case tan the  charges against Draper suggest: Continue reading “A "fall" festival? Draper sentencing set in beef plant fiasco set for Halloween”

A “fall” festival? Draper sentencing set in beef plant fiasco set for Halloween

James Draper was such a minor player in the beef plant case that I doubt few even know his name; yet, of all the folks involved, Draper is the one facing the longest sentence – and, if the government gets what it wants, his sentence will be even longer after the Halloween Day hearing. The Clarion-Ledger ran a brief update in today’s paper. h/t Phunk and Wagnalls

James Draper, convicted by a jury for his part in the Mississippi Beef Plant scandal, will be sentenced on Oct. 31. The government is asking Chief Judge Michael Mills to deal more harshly with Draper, a refrigerator salesman from Tennessee, than a pre-sentence report recommends.

Draper was convicted July 23 on two counts — aiding and abetting the interstate transportation of money obtained by fraud, and of money laundering — in bilking the state out of $187,725. The government filed a four-page motion Tuesday urging Mills to consider that Draper lied during his two-day trial in U.S. District Court.

Based on the charges against him, it would seem Draper had no information to trade for a lighter sentence – but there’s more to the story of this puzzling aspect of the beef plant case tan the  charges against Draper suggest: Continue reading “A “fall” festival? Draper sentencing set in beef plant fiasco set for Halloween”

Jim Brown on AIG and LAx Insurance Regulation

Jim Brown was kind enough to share his most recent column with us here at Slabbed and it is well worth reading. – Sop

Thursday, October 23rd, 2008
Baton Rouge, Louisiana

MORE BAD NEWS ABOUT INSURANCE IN LOUISIANA

The financial crisis on Wall Street has filtered down through the insurance industry, with a number of major insurance companies facing a rocky road in the coming weeks. The New York Times concluded this week that “insurance companies are now being battered, suggesting that a similar round of consolidation and recapitalization may be in store.”

Many national insurance companies are under siege, and even though Louisiana is a small state in population, policyholders will be affected proportionally at a much greater degree than in most other parts of the country.

The reason for this is that Louisiana is a major customer for many insurance companies both nationally and worldwide. It’s not the population that matters. It’s where the risks are located. And there are a number of major companies operating in Louisiana that have significant exposure for insurance purposes. Just imagine the cost of insuring the offshore oil industry operating along Louisiana’s coastline. How about the nation’s largest chemical industry located up and down the Mississippi River? And there are major risks to insure in the first, third, and fifth largest ports in this country all located in Louisiana. In short, Louisiana is in the top five of states that have the highest industrial insurance risks. Continue reading “Jim Brown on AIG and LAx Insurance Regulation”

The "F" word hits the road – finds Wall is dead end Street (Part 2 of 3)

Wind sucks, wind damage to your house sucks, having coverage denied because someone can’t figure out how much damage wind did to your house sucks, having one policy for wind damage and another for flooding sucks – but what really sucks is the “F” word doesn’t know a suckin, f’n thing about wind damage from a hurricane and if you don’t believe that, read the report. JMHO

Final statistically unreliable report- Hurricane Katrina: Wind Versus Flood Issues.

When Congress passed the Department of Homeland Security Appropriations Act 2007, language was added requiring the OIG to investigate whether and to what extent insurance companies participating in the NFIP improperly attributed damages from Hurricane Katrina to flooding rather than to windstorms covered under homeowner policies or wind insurance pools.

There were 209,404 NFIP flood insurance claims filed for Hurricane Katrina, according to the table on page 6 of the OIG report.

  • 98-100 paid claims were reviewed prior to the interim report released July 2007.
  • The number of paid claims reviewed increased to 131 – .0062% of total claims -in the final report.
  • 123 of the 131 paid claims also received payment for wind damage – 94% of those reviewed

Sop, who actually conducts investigative GAAS audits and prior to specializing in construction performed Single audits for certain state governemntal entities, is going to follow with our collective opinion on the disconnect we found between reported data and the OIG’s findings (Results of Review, page 5) – hopefully explaining how data show 1.5 % of the NFIP claims paid for wind damage while the related finding states, Based on the files in our sample, NFIP did not pay for wind damage…duh!

However, because the sampling technique selected by the OIG is indicative of the larger problem created by the “F” word following Hurricane Katina, it is important to point out the 131 paid claims were a Judgmental Sample. Continue reading “The "F" word hits the road – finds Wall is dead end Street (Part 2 of 3)”

The “F” word hits the road – finds Wall is dead end Street (Part 2 of 3)

Wind sucks, wind damage to your house sucks, having coverage denied because someone can’t figure out how much damage wind did to your house sucks, having one policy for wind damage and another for flooding sucks – but what really sucks is the “F” word doesn’t know a suckin, f’n thing about wind damage from a hurricane and if you don’t believe that, read the report. JMHO

Final statistically unreliable report- Hurricane Katrina: Wind Versus Flood Issues.

When Congress passed the Department of Homeland Security Appropriations Act 2007, language was added requiring the OIG to investigate whether and to what extent insurance companies participating in the NFIP improperly attributed damages from Hurricane Katrina to flooding rather than to windstorms covered under homeowner policies or wind insurance pools.

There were 209,404 NFIP flood insurance claims filed for Hurricane Katrina, according to the table on page 6 of the OIG report.

  • 98-100 paid claims were reviewed prior to the interim report released July 2007.
  • The number of paid claims reviewed increased to 131 – .0062% of total claims -in the final report.
  • 123 of the 131 paid claims also received payment for wind damage – 94% of those reviewed

Sop, who actually conducts investigative GAAS audits and prior to specializing in construction performed Single audits for certain state governemntal entities, is going to follow with our collective opinion on the disconnect we found between reported data and the OIG’s findings (Results of Review, page 5) – hopefully explaining how data show 1.5 % of the NFIP claims paid for wind damage while the related finding states, Based on the files in our sample, NFIP did not pay for wind damage…duh!

However, because the sampling technique selected by the OIG is indicative of the larger problem created by the “F” word following Hurricane Katina, it is important to point out the 131 paid claims were a Judgmental Sample. Continue reading “The “F” word hits the road – finds Wall is dead end Street (Part 2 of 3)”