For what is a man, what has he got?
If not himself, then he has naught.
a good neighbor, the one on your side, good hands people – the relationship between policy holders and their insurer is one of trust. – beginning with trust in the local agent that sells the policy; reflected in trust of the company that follows.
Yet behind the clever slogans and familiar faces lies a culture that views every claim as a potential case of insurance fraud – and trust is replaced with betrayal. Premium dollars have made fraud detection a separate industry – one with its future riding on the continued public perception of widespread insurance fraud.
Fraud, to be certain, is a serious problem; however, the resulting problem-focused solutions have created far greater problems.
I planned each charted course;
Each careful step along the byway
The industry’s response to Katrina -captured in Frontline’s The old man and the storm – has been nothing short of a disaster itself, as this preview of the January 6, 2009 annual update suggests. The charted course – a haystack of needles – is an enterprise management system.
From an IT management perspective, Enterprise Management essentially means enterprise-wide network administration, which is becoming increasingly complex. The corporate network environment is no longer tied to a single vendor, let alone a single platform. More and more, corporate intranets are multidomain, multiprotocol, multiplatform systems. They contain hardware and operating systems from a number of different, competing vendors…
End-to-end, EMS has shaped the claims handling system into a massive fraud prevention system capable of fraud so subtle it would have gone undetected had all of its functions been fully developed.
I did what I had to do
and saw it through without exemption
Innovative software, pioneering use of technology, and a highly touted management program – the laudable tools of success when used as intended. Otherwise, none were more than what they became together, the newest version of the tricks of the trade fashioned by the most advanced information management system ever made – the human brain – into the scheme, a needle hidden in a haystack of needles.
Regrets, I’ve had a few;
But then again, too few to mention.
A few regrets, too few to mention? Maybe a few reminders will help
A few regrets – the human cost is an incalculable loss of life, of home, of opportunity and emotional and economic security.
A few regrets – premiums that policyholders paid on a contract intended to provide protection were instead spent on media campaigns, lobbying and lawyers that made them more vulnerable.
But through it all, when there was doubt,
I ate it up and spit it out.
As it became evident return on investment of premium payments was insufficient, the industry shifted focus to reducing loss to increasing profits and Six Sigma. management strategies.
It’s the CEO and only the CEO who can make Six Sigma successful in an organization.
Each Six Sigma project carried out within an organization follows a defined sequence of steps and has quantified financial targets (cost reduction or profit increase).
A number of software products have the capacity to integrate Six Sigma into the functionality of the EMS for any of the Six Sigma companies. One of the companies on the list is Computer Sciencies Corporation (CSC); and, interestingly, none on the list are insurers.
In other words, the Enterprise is not a single insurer but the property/casualty insurance industry inclusive of insurers and reinsurers world wide and, via BureauNet, the National Flood Insurance Program. CSC is the enterprise manager.
There’s nothing inherently wrong with that structure or with the intranet that builds community among the users. In fact, there is much to be said for the efficiency of a system that includes all functional components of an insurance industry with the capacity to meet the needs of both an individual insurance/ reinsurance companies as well as the industry as a whole.
In a perfect world, it would be the perfect approach.
Yes, there were times,I’m sure you knew
When I bit off more than I could chew.
On August 29, 2005 the world was far from perfect as the power of wealth crossed path with the force of nature putting EMS to the ultimate test. Katrina made landfall and all the games began in earnest.
First, there was the word game – windstorm – although hurricanes are formed from thunderstorms.
The word game was central to the mind game of concurrent causation – a distinction possible only when science is ignored and a hurricane is considered a windstorm. The twisted words fuel a blame game in and out of court – blame the policyholders who didn’t buy the coverage needed, blame the lawyers for taking their cases, blame everyone and everything but the insurers’ choice to make policy language a profit center.
All of the games converge at the center of the power game explained by Lawrence Lessig, Professor of Law at Stanford Law School and founder of the school’s Center for Internet and Society.
…non-obvious corruption–instances where a decision is improperly and/or subtly influenced by a government actor’s anticipation of some sort of indirect economic gain or loss. Where a person in power is motivated more by, e.g., money to their campaign, support for favored research, etc., than the interests they claim to or otherwise should be advancing.
What was it, then, that influenced David Maustaud’s decision on the Expedited Claim Handling Process?
Until the Rigsby sisters pulled the covers back and filed their qui tam claim, the Maustaud covered the scheme in progress.
What accounts for the Senate’s failure to pass HR3121?
Chris Dodd has supported every bailout save the one that would have stimulated the economy and recovery of hurricane damaged Mississippi, Louisiana and Texas.
A recent Tom Friedman column on the financial crisis illustrates an undeniable comparison and provides insight.
This financial meltdown involved a broad national breakdown in personal responsibility, government regulation and financial ethics.
So many people were in on it: People who had no business buying a home, with nothing down and nothing to pay for two years; people who had no business pushing such mortgages, but made fortunes doing so; people who had no business bundling those loans into securities and selling them to third parties, as if they were AAA bonds, but made fortunes doing so; people who had no business rating those loans as AAA, but made fortunes doing so; and people who had no business buying those bonds and putting them on their balance sheets so they could earn a little better yield, but made fortunes doing so.
Citigroup was involved in, and made money from, almost every link in that chain. And the bank’s executives, including, sad to see, the former Treasury Secretary Robert Rubin, were clueless about the reckless financial instruments they were creating, or were so ensnared by the cronyism between the bank’s risk managers and risk takers (and so bought off by their bonuses) that they had no interest in stopping it.
…check out Michael Lewis’s superb essay, “The End of Wall Street’s Boom,” on Portfolio.com. Lewis, who first chronicled Wall Street’s excesses in “Liar’s Poker,” profiles some of the decent people on Wall Street who tried to expose the credit binge…Lewis also tracked down Steve Eisman, the hedge fund investor…
‘We always asked the same question,’ says Eisman. ‘Where are the rating agencies in all of this? And I’d always get the same reaction. It was a smirk.’ He called Standard & Poor’s and asked what would happen to default rates if real estate prices fell. The man at S.& P. couldn’t say; its model for home prices had no ability to accept a negative number. ‘They were just assuming home prices would keep going up.
Friedman said that’s how we got here – a near total breakdown of responsibility at every link in our financial chain.
The Scheme, likewise, represents a near total breakdown of responsibility in the insurance industry at every link – a breakdown from the language of the policy to the decisions that made NFIP reinsurance by default following Katrina when only Kamp Re was triggered by the disaster.
Who done it?
Who had the motive? the means? the opportunity? Who in the insurance industry did not?
And now, the end is near;
And so I face the final curtain
Who done it?
We’ll find out in ex rel Rigsby v State Farm.