Speaking of Socialism and Mississippi Republicans. An Open Letter to our Favorite Captured Regulator the Commish

Anita Lee is always good but today she is also heaven sent. It seems the Consumer Federation of America and United Policyholders have taken Mr Chaney to task for not doing a good job looking out for consumers. Duh! I guess we should be grateful he has finally gotten around to the fortified bunker program.

I guarantee Kevin Buckel and Amy Bach aren’t the only two people that our Commish feels free to ignore. IMHO Chaney and his staff were too busy leaking David Rossmiller info about the Market Conduct Study to bother with such trivialities.

In any event (and while we wait to hear what Mr Matthews and Company think of Mr Chaney and his Market Conduct Study) here is Anita Lee’s story about how consumers/voters need not apply for access to the Commish -he is simply too busy.

Mississippi Insurance Commissioner Mike Chaney needs to do a better job for consumers, two national organizations have concluded, but Chaney said Wednesday night that he he has “a full platter.”

The Consumer Federation of America says the Insurance Department’s Internet site does an inadequate job of giving consumers information that would help them save money on insurance, find the best home and auto policies and avoid companies that employ unfair claims practices.

J. Robert Hunter, CFA’s director of insurance, rated Mississippi’s site, along with those in 17 other states, as inadequate. Only six states have sites rated excellent, but 27 managed good or fair ratings.

Chaney, in office less than a year, said his department has studied other Internet sites and hopes to put together rate comparisons for consumers in Mississippi. But Chaney said his top priority right now is to secure state funds for a program to bring down insurance rates through construction of stronger homes.

Chaney also acknowledged that he has not responded to a Long Beach policyholder’s repeated e-mails calling for a committee to study improving policyholders’ rights and for numbers that would show the average amount insurance companies paid on Katrina claims.

Chaney said his department is working to strengthen its regulatory bill of rights and has no control over state legislation Kevin Buckel has pushed unsuccessfully for the last two sessions. One addition to the departments policyholder rights would be a court opinion that says insurance companies have the burden to prove a policy exclusion caused a loss in order to deny coverage.

Buckel and the Sun Herald have been unsuccessful in getting updated numbers on how much insurance companies paid in Katrina claims. Deputy Commissioner Lee Harrell said the department stopped collecting the information a year or so ago.

In states such as California and Florida, policyholders can go to department Web sites to find out how insurance companies performed after earthquakes and hurricanes.

Buckel enlisted the United Policyholders of America to write Chaney a letter one month ago, asking the commissioner to answer Buckel’s questions. Amy Bach, executive director of the California-based group, said Chaney has not responded. Chaney said he never saw Bach’s letter.

Bach said residents and the business community need to push for consumer friendly regulations and legislation.

“I think your citizens are going to have to be a lot louder,” she said. ” You need a lot more Kevins out there making noise. And you need influential people in the business community. They have to speak out loudly.”

Text of Letter from Amy Bach to Mike Chaney that Mr Chaney ignored along with Mr Kevin Buckel:

Dear Commissioner Chaney:

I have not yet had the pleasure of meeting you at the proceedings of the National Association of Insurance Commissioners. I attend the quarterly NAIC meetings as a consumer representative, although I will not be at the upcoming Winter meeting in Houston. I have enjoyed visiting with the Commissioners from your neighboring states of Louisiana and Florida at recent meetings to discuss issues of shared concern regarding catastrophe insurance, state run pools, price spikes and availability shortages.

I’m writing to introduce you to United Policyholders and ask for your assistance. UP is a national insurance consumer organization that is dedicated to educating the public on insurance issues and policyholders’ interests, and to helping solve marketplace and claim-related problems. Our organization is a resource for disaster victims and we strive to make constructive contributions to the adoption of laws that relate to insurance matters.

United Policyholders provided support and assistance to the citizens of Mississippi and particularly to employees of the Chevron Corporation in the aftermath of Hurricane Katrina. Representatives of our organization were saddened by the number of victims whose claims were being unfairly denied but who told us they believed their elected representatives were “in the pocket” of insurance companies and would not help them. So many homeowners who paid good money for coverage and claim service were forced to turn for help to lawyers instead of to their elected representatives.

In the course of that work we connected with a gentleman by the name of Kevin Buckel who is an outstanding example of a public-spirited citizen volunteering his time to help future disaster victims and strengthen the law to better protect Mississippians from unfair treatment by insurance companies and adjusters.

As you know, Mr. Buckel has been diligently pursuing legal reforms in the state legislature as an unpaid grass roots citizen lobbyist. I have the utmost admiration for Mr. Buckel. I understand you recently heard him testify at a hearing, but that you have not responded to the following specific questions he has posed:

October 14, 2008 Page 2 of 2

1. Will you form a committee to study and identify legislative reforms that are needed to strengthen legal protections for policyholders in your state?

2. Do you dispute or agree with the fact that according to information published by the Sun Herald and the Insurance Information Institute, the average amount insurers paid to homeowners on Katrina claims was $15,428. (350,000 claims settled, $5.4 Billion Paid on 65,380 homes destroyed).

Certainly if #2 is correct, a public hearing or fact-finding proceeding is in order and overdue. Question #1 is entirely reasonable and seems entirely warranted.

We believe these are important and very reasonable questions that deserve a detailed, honest response from your office. So, we are writing to ask that you provide Mr. Buckel with the answers he has asked for.

Sincerely,

Amy Bach

Executive Director

13 thoughts on “Speaking of Socialism and Mississippi Republicans. An Open Letter to our Favorite Captured Regulator the Commish”

  1. I bet his plate is full…He released a report slabbing the Rigsby sisters and found out later the report’s own data negated every word it said about the Rigsbys – instead, it proved the ambiguity of the ACC.

    I leave you to speculate what’s filling his plate.

  2. Of course Anita’s story was a fine one, if you believe that everything Commissioner Chaney does is wrong. Actually, the study covered websites, and is not a general, blanket condemming of what Chaney does. Bad reporting also on K. Buckel. Chaney has answered Mr. Buckel’s questions many times but since they are not the answers Mr. Buckel desires, he prefers to think he was not answered.
    And on a final note, do you not feel that you are hurting the very area you espouse to help with this constant barrage of criticism and complaints? Why would anyone want to come to the Gulf Coast after reading the Sun Herald and y’all’s various blogs? Your entire focus seems to be to tear down, belittle progress and whine.

  3. I won’t condemn Kevin Buckel because he is holding his insurance commissioner accountable Robert. The man is a resident of the State of Mississippi and he deserves an answer to his simple questions.

    Mr Chaney doesn’t make the laws anymore, that would be Buck Clark’s job. He could however do the things Mr Buckel has asked of him since it does not involve legislation. Instead he tap danced around both issues.

    We’ve given the Commish props here in Slabbed when he did good. We’re also going to hold him accountable for what he does bad whether it is sticking his foot in his mouth proclaiming via MID press release wind pool premiums were at pre Katrina levels, white washing obvious State Farm Fraud against Mississippi residents or being unfriendly to consumers.

    Of course we’re an open minded bunch here at slabbed and if the Commish wants to tell his side we’d welcome it, especially if he can elaborate or expand on something that is missing from Anita Lee’s reporting. In short we’d love to have him, hell we’d even let him write a guest post.

    Since my only email to him was also never replied to (he did acknowledge receipt later on in person) I’m not holding my breath. (though they do read us)

    In any event we appreciate your post and viewpoint Robert.

    sop

  4. One other thing. Mr Chaney spoke in advance of people being angry about the Market Conduct Study. For my own part I’m not angry and figure he is a decent enough sort in person.

    That does not stop me from concluding he is the wrong man for the job. Though I supported Gary Anderson and made no secret of that I kept an open mind for months using only the actions of MID to gauge Mr Chaney’s performance. I’ve seen enough to feel comfortable with my conclusions regarding same.

    sop

  5. I’ve been the one in Chaney’s corner, convinced he’s more than just decent sort of person.

    I’ve led cheers when there’s been something positive to put in a post and glossed over or even ignored the rest – particular anything that I felt he “inherited” and could do little about.

    The report of the Market Conduct Exam should not have been a reflection on Chaney.

    Sop wrote a very strong post on the integrity of the methodology used by the examiners and how superior it was to that of the OIG report.

    Chaney made it a reflection on him – one that, to my sorrow, stamped a big “bought and paid for” label on him that will be there as long as he serves.

    Did he not look at models from other states? Did he review the industry Handbook for these reports? Did he put too much trust in people with loyalty elsewhere? I don’t know.

    All I know is that he personally signed off on a report that combined a respectable examination of fact with a second section of opinion that had no place in the report.

    He personally made the decision to release a report that reflected poorly on his personal integrity, the integrity of his leadership of MID, and on our State – and that just flat breaks my heart.

    nowdy

  6. How are they coming up with that average number? Averages are not always a good indicator, but even the total divided by the houses destroyed seems low.

    Are the “flood” destroyed homes being counted in the total, including those paid out on with Fed flood insurance?

    If the answer is yes, then the argument isn’t that their payouts are to low per claim, but that they are refusing to pay out at all. A very different sort of argument.

  7. These market conduct studies are bullshit and everybody knows it. In one ouf our cases, Allstate threatened to try to use a so-called “favorable” market conduct study at trial. We said “great” and subpoenaed a lawyer/representative of the LID so that we could cross-examine him relative to the validity (or lack thereof) of the methodology used in the study. Then, of course, that issue disappeared very quickly. I don’t believe it was ever raised again as an issue in any other case. I suspect the same would be true if the Farm tries to do the this in Miss.

  8. Russell, unless Brian has information to the contrary, I believe the answer is yes and that you are correct about the implications. I’ve been looking over other data and wondering how little some were paid if the average was so low and the cost of some of the big claims we know have been paid were included.

    Add a ditto to Rick’s experience (comment) to your insightful comment and you’ve got the basis for that “very different sort of argument” IMO

  9. Russell nailed it. State Farm’s own rhetoric bears the point out when they would post how many claims they settled across the state and point out the problem was with a fraction of the claims. What they didn’t say was in dollar terms one Dr MacFarland slab claim was worth anywhere from 80-140 roof claims.

    To his credit the MID examiner recognized that fact and stratified his samples in order to get a feel for the ugly bumps in dollar terms. The rest is history as he found State Farm underpaid the vast majority of their wind claims when coupled with water and did not document adjusting a startling number of their wind-water claims.

    The OIG OTOH pulled their sample from the entire universe of claims but still found problems somewhat proportional to the unsettled claims that we speak of so often here. They dismissed their findings as not statistically significant but when you use flawed methodology you get the desired result.

    It’s really quite simple when you think about it. State Farm had no incentive to single out and abuse policyholders in the three coastal counties for it’s own sake. Rather, many of the houses lost to the storm were very high dollar residences so SF could control their dollars out through a relativly small number of claims.

    Follow the money folks, all the rest including the conclusions of the OIG and Mr Chaney is pure BS.

    sop

  10. Here are some old numbers of Katrina claims, not including wind pool, NFIP, or surplus lines:
    http://www.mid.state.ms.us/katrina/katrinaclaims.htm
    These numbers add up to 473,973 claims for $6,747,688,854, an average of $15,766.62 per claim.
    Averages are tricky. The average private insurance payment was $30,000 in Harrison, $28,000 in Hancock, more than $15,000 in Jackson County, and below $15,000 in the other 79 counties.
    About 90% of Katrina insurance claims in Mississippi were in places where there was no flooding at all, so there could be no dispute about the cause of the loss.

  11. That basically left them with just 10% of claims to “manage” which seems to be about what they had in the 3 coastal counties.

    The more you learn the more unbelievable it becomes. Thanks for the updated numbers.

    I’ve been thinking about another puzzle. There were a good many flood claims denied. Do you have general understanding of how many/why?

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