No standing? Mississippi insurance law gives AG Hood standing

Perhaps Rankin County Judge John Grant really knows how to spell judgment and wasn’t violating Section 7-5-301-5 with his opinion dismissing the Attorney General’s lawsuit against the insurance industry filed in Hinds County Chancery Court. I’ll leave that to the folks at Y’all to figure out as I picked this decision up reading there.

Therefore, the Court finds that the Attorney General has no standing to assert claims on behalf of Nationwide’s or Allstate’s policyholders with regard to the subject policies, including flood exclusions. Judgement (sic) on the pleadings in regard to Defendant’s argument that the Attorney General lacks standing to challenge the private insurance contracts at issue should be granted to Defendants.

The standing of the Attorney General I found in the State Code.  Note the Attorney General has had this authority since 1998 and the date of the last amendment to this section was prior to Katrina.

7-5-301. Insurance Integrity Enforcement Bureau; creation; purpose.

There is created within the Office of the Attorney General an Insurance Integrity Enforcement Bureau. The duty of the bureau is to investigate and prosecute claims of insurance abuses and crimes involving insurance. The Attorney General may employ the necessary personnel to carry out the provisions of Sections 7-5-301 through 7-5-311.

(a) “An insurance plan” means a plan or program that provides health benefits whether directly through insurance or otherwise and includes a policy of life or property and casualty insurance, a contract of a service benefit organization, workers’ compensation insurance or any program or plan implemented in accordance with state law or a membership agreement with a health maintenance organization or other prepaid programs.

(b) Insurance official” means:
(i) An administrator, officer, trustee, fiduciary, custodian, counsel, agent or employee of any insurance plan;
(ii) An officer, counsel, agency or employee of an organization, corporation, partnership, limited partnership or other entity that provides, proposes to, or contracts to provide services through any insurance plan; or
(iii) An official, employee or agent of a state or federal agency having regulatory or administrative authority over any insurance plan.

(2)  A person or entity shall not, with the intent to appropriate to himself or to another any benefit, knowingly execute, collude or conspire to execute or attempt to execute a scheme or artifice:

(a) To defraud any insurance plan in connection with the delivery of, or payment for, insurance benefits, items, services or claims; or
(b) To obtain by means of false or fraudulent pretense, representation, statement or promise money, or anything of value, in connection with the delivery of or payment for claims under any plan or program or state law, items or services which are in whole or in part paid for, reimbursed, subsidized by, or are a required benefit of, an insurance plan or an insurance company or any other provider.

(3)  A person or entity shall not directly or indirectly give, offer or promise anything of value to an official, or offer or promise an insurance official to give anything of value to another person, with intent to influence such official’s decision in carrying out any of his duties or laws or regulations.

(4)  Except as otherwise allowed by law, a person or entity shall not knowingly pay, offer, deliver, receive, solicit or accept any remuneration, as an inducement for referring or for refraining from referring a patient, client, customer or service in connection with an insurance plan.

(5)  A person or entity shall not, in any matter related to any insurance plan, knowingly and willfully falsify, conceal or omit by any trick, scheme, artifice or device a material fact, make any false, fictitious or fraudulent statement or representation or make or use any false writing or document, knowing or having reason to know that the writing or document contains any false or fraudulent statement or entry in connection with the provision of insurance programs.

(6)  A person or entity shall not fraudulently deny the payment of an insurance claim.

Sources: Laws,  1998, ch. 561, § 2; reenacted without change, Laws, 2000, ch. 424, § 2; reenacted without change, Laws, 2003, ch. 439, § 2, eff from and after July 1, 2003.

I also found another interesting Code section: 7 – 5 – 51.

The attorney general, as well as the several district attorneys, is hereby authorized to institute or defend any suits arising out of any act or order of the tax commission or the public service commission affecting the laws and revenues of the state.

Frankly, I don’t see a lack of standing – a lack of understanding, yes, but it seems the Attorney General has all the standing needed.

9 thoughts on “No standing? Mississippi insurance law gives AG Hood standing”

  1. AG’s right to prosecute cases under 7-5-301 et seq for crimes related to insurance doesn’t establish standing to litigate on behalf of policy holders the contractual language of the insurance policy. Or at least that is how I read it.

  2. Mike Chaney, George Dale, Bush’s DHS OIG and David Rossmiller may not see the applicability of subsection 6 regarding fraudulent denials but the other 300 million of us do.

    Aside from the colorful blowup I thought the post and the Judg’s ruling were pretty weak. 🙂

    Don’t they teach Judges to spell in Rankin County? Green acres is the place to be…..

    sop

  3. BTW and to clarify – I also thought Jim Hood’s suit was weak and represents a sideshow from the real problems highlighted in the policyholder litigation.

    It’s telling how the other Mississippi based blogs (Yall and Sid Salter) commenting on this case ignored three far larger and more important cases in Grilletta, Dickerson and Shows. The mind of a 30 percenter is a strange and mystical thing…..

    sop

  4. Are you saying the contractual language isn’t part of an “insurance plan” and contained in a “document”? As long as it’s either of the two, the AG has the power to initiate legal action and I can’t think of where they’d put it if not in one of the two. Of course, since I’m not a lawyer, I have to rely on what the courts call the “plain English” reading.

  5. just thought I’d mention that no one has explained how a Rankin Co. judge (who couldn’t spell judgment) ended up with Hood’s case.

    The AG filed the case in Chancery Court in Hinds County…that’s the 5th Chancery district.

    Rankin Co. – also a single county district like Hinds and DeSoto – is the 20th Chancery district.

    Hinds has four chancery judges, Rankin only two.

    Someone had to move the case…the point that judge was out of county was made on y’all but no mention that judge was also out of district and no reason given. (as if there could be one)

    Interesting.

  6. No, I’m saying that counts 1-4 of Hoods complaint don’t allege fraudulent denial of payment under an insurance plan. They allege that some policy language is ambiguous, that other language is or should be against public policy etc. But those are not claims of fraudulen denial of payment that would fall under paragraph 6, and therefore there is no standing for the AG to be involved.

    Looks like AG woul/might have standing under (6) for the 5th count of the complaint alleging denial of payments. Best I can tell is that AG didn’t assert standing based on 7-5-301-6. Will be interesting to see if there is motion to reconsider or some other response to the order.

    My .02 and I’m not a lawyer either.

  7. You’re right. IMHO he filed the suit way too soon and was ultimately taken to school by the Farm and their legal team. That has been obvious for the better part of a year now. Today it is a sideshow.

    If you have been following Gagne we are beginning to see a pattern, the same one that was present in McIntosh, Mullins, etc etc etc etc.

    I don’t know about you Justme but despite being jaded by around 44 years of existence I still believe in right and wrong. If a contractor has done this; taken someones money and then spend years manufacturing excuses why he wouldn’t build the house I do believe he’d be in ‘cuffs. I’ve seen it myself many times since Katrina. In fact.

    What makes an insurance company that lies, cheats and steals from it’s customers any different from a shady contractor? Nothing in my book.

    Anita Lee’s article on Grilletta reveals serious public policy problems in Mississippi. Against that backdrop wasting time throwing elbows at Jim Hood comes across as pretty petty in the scheme of things. The next election is still years off, perhaps in the meantime the pols can pull together to help the citizenry instead of pi$$ing all over each other to no good end.

    I know, if I hold my breath waiting for that I’d die gasping for air. Still I don’t think it’s too much to expect.

    sop

  8. Interesting comments but my post does not claim Hood’s standing comes from 7-5-301-6. Instead I claim the Insurance Integrity Enforcement law gives the AG all needed standing to initiate suit under this or any related state law.

    Sop mentioned that Code section and his reference is not inconsistent with justme’s opinion re: count 5 of the AG’s Complaint.

    more later, I see something in email that needs to be posted.

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