Month: February 2009

Responding to Extraordinary Loss – Reeling and Writhing, of course, to begin with, and then the different branches of arithmetic — Ambition, Distraction, Uglification, and Derision.

It would be so nice if something made sense for a change.

Was there any other way to do the arithmetic?  Expedited Claim Handling Process

Would that have included litigation cases from cat losses in “2005” not signed, settled and sealed until 2008? Delay, Deny and Deceive shows up on your balance sheets sooner or later. (CLS)

If I had a world of my own, everything would be nonsense. Nothing would be what it is, because everything would be what it isn’t. And contrary wise, what is, it wouldn’t be. And what it wouldn’t be, it would. You see?

What would really be interesting to know is what was said (not written) to the WYOs about the process. We may find out is some of the litigation still pending on the coast. I guess my point is, if standards were “relaxed”, did the gummint really want the WYOs to go through a lengthy battle of what is wind and what is flood?(Sampson)

I can’t explain myself, I’m afraid, Sir, because I’m not myself you see.

Sampson, I wondered what was said, too.  In fact, before I could write the scheme in its published form, I had to create a connection.  Obviously, I didn’t intend to publish it; but, since I have the keys to this place, I can lock it back up.

August 29, 2005. almost daylight. somewhere…Someone had started fresh coffee and anyone who had slept in their chair began to move as the smell filled the air and the rest of the group starting coming into the room.

His head was still down on the table but he’d opened his eyes and could see one set of hands working quickly to remove the remains Continue reading “Responding to Extraordinary Loss – Reeling and Writhing, of course, to begin with, and then the different branches of arithmetic — Ambition, Distraction, Uglification, and Derision.”

Katrina insurance litigation – selected Nationwide and State Farm cases

Early in the month I began a somewhat regular “sweep” of Katrina insurance cases in the federal court with new docket entries.    In a single day recently, docket entries were made on approximately 75 different cases.  It would be impossible to estimate exactly how many different cases had one or more docket entry during the month of February; but, I’m willing to guess hundreds.

Obviously, someone has to read every one of those new documents.  I’m not the one.  In this short and busy month, it has been difficult at times  to “sweep” my kitchen, much less the case files – so much so, in fact, this could be called a “lick and a promise” post about cases that caught my eye.

Nationwide, you may recall, is the carrier that prompted Judge Senter’s memorable “illusionary coverage” remark.  At this point, it appears the “illusion” morphed into a  “delusion” with Nationwide thinking he would eventually see things their way.  While he has been “on their side” at times, I’ve seen Judge Senter issue an order in several Nationwide cases that I don’t recall seeing elsewhere.  Consequently, I’ve also seen another first, Notice of Private Mediation:

Pursuant to the Court’s January 12, 2009 Order for Mediation, counsel for Defendants Nationwide Mutual Fire Insurance Company, Ntionwide Mutual Insurance Company, and Nationwide Property and Casualty Insurance Company, on behalf of both parties, hereby advises the Court that the parties will hold a private mediation on or before March 19, 2009, in lieu of participating in the Court-supervised mediation program.

Since I don’t want to commit the logical fallacy of suggesting correlation proves causation, I will simply point out I noted a number of Nationwide cases were settled this week.

However, other Nationwide cases I pulled do not appear to be moving in that direction.  Politz v Nationwide , for example, is a dispute about the plaintiff’s private coverage with Nationwide – although you might think  otherwise.  Nationwide focused on NFIP and other disaster assistance the Politz received and did so in a way that its conduct appears contrary to the NFIP Litigation Philosophy: Continue reading “Katrina insurance litigation – selected Nationwide and State Farm cases”

Well, State Farm’s net worth is 68% higher than the end of 2002 – after the just reported $10.4 billion drop!

‘plain that Sop! I didn’t make it up, it’s the latest from the National Underwriter.

State Farm today reported its net worth dropped $10.4 billion—to end the year at $53.3 billion—and an after-tax loss of $542 million for 2008.

The Bloomington, Ill.-based mutual insurer said the primary reason for the decrease was the $9.2 billion decline in the value of the property-casualty company’s stock portfolio. The decline comes after five consecutive years of net worth increases, and despite the decline, the company’s net worth is 68 percent higher than it was at the end of 2002, the company said. Continue reading “Well, State Farm’s net worth is 68% higher than the end of 2002 – after the just reported $10.4 billion drop!”

Decisions, decisions…..

And we some hard choices to make for our nominees to the LexisNexis Insurance Law Center 2008 Person of the year:

The LexisNexis Insurance Law Center is now receiving nominations for the Center’s “Insurance Law Persons of the Year” award. The award, like similar awards in other fields, seeks to identify and recognize people who have been a major force in the insurance law during the preceding year. We anticipate that the awards will continue to be given each year.

The Insurance Law Center will select the following:

Policyholder Attorney of the Year – the attorney who did the most in 2008 to effectively advance policyholder positions and improve insurance law from the perspective of policyholders.

Insurer Attorney of the Year — the attorney who did the most in 2008 to effectively advance insurer positions and improve insurance law from the perspective of insurers. Continue reading “Decisions, decisions…..”

Speaking of lobbying – NFIP pays insurance company legal fees in flood claims disputes!

We are pleased to transmit to you the Federal Insurance Administration’s (“FIA”) new Guide for Write Your Own Counsel. This Guide provides important information on the policies and procedures to be followed by Write Your Own Companies (“WYO Companies”) and their counsel in litigation involving the National Flood Insurance Program (“NFIP”)…

Since the inception of the WYO Program in October 1983, defense of lawsuits based on the SFIP has generally been handled smoothly and effectively. We stand ready to continue to offer support to WYO Companies in all litigation matters concerning the NFIP in our ongoing spirit of partnership.

Can you believe it? I can not – but google search results for “NFIP litigation” offered a copy.

This Guide for Write Your Own Counsel (“Guide”) has been developed by the Federal Insurance Administration (“FIA”) and the Federal Emergency Management Agency (“FEMA”) Office of General Counsel (“OGC”) to assist Write Your Own (“WYO”) Companies and their counsel defending National Flood Insurance Program (“NFIP”) litigation.

So much for thinking it is the deep pockets of the insurance industry that put most NFIP policyholder-plaintiffs at a financial disadvantage in litigation – those deep pockets are in Uncle Sam’s pants!

The FIA and WYO Company share a unique and common interest in the defense of cases related to the NFIP. Among other factors that give rise to this shared interest are the fiduciary responsibilities of the Company, the statutory and regulatory basis for the NFIP, the Federal government’s administrative and oversight responsibilities for the program, the need to share privileged information, and the fact that Federal funds are at risk. Accordingly, through the Arrangement, the FIA and the WYO Company have entered into a joint defense agreement to implement FEMA’s oversight responsibilities for the purpose of any litigation related to or arising under the NFIP to enable the free flow of information between the FIA, FEMA OGC, the WYO Company, and its legal counsel.

“Unique” is not exactly what I’d call the the government’s “common interest” with the insurer defendants in Katrina litigation.  I wonder if Judge Senter had a better word in mind in the “opinion” he would not “venture” in his December 12, 2008 Order in Gagne v State Farm. Continue reading “Speaking of lobbying – NFIP pays insurance company legal fees in flood claims disputes!”

Yep we done went and did it. Senator Chris Dodd, welcome to Slabbed

I’ll be honest and say this could be the end result of several straight 16 hour work days but I sent our current favorite US Senator here at slabbed a cyber greeting card last night over at HIG, which is getting killed agian today in trading. But then Steve called my youtube vid and raised the pot in a way that would make certainly make Brother Bennett proud so we’ll begin with it.

[youtube=http://www.youtube.com/watch?v=zgjmD93pTVE]

And now the one I left for the Senator: Continue reading “Yep we done went and did it. Senator Chris Dodd, welcome to Slabbed”

News from the cat house……

Time is short so I’ll not offer much analysis and what analysis I offer is in the form of the questions I asked myself while reading it?

  • What money “made the market” and how and to whom are the bonds placed (ie sold)? See this lengthy post I did a week or so back to understand why that question is important.
  • What role is TARP playing in financing this deal? Inquiring minds in policymaking positions what to know. (See first bullet point)
  • Who are the players making money from the act of doing the deal and how is it structured to avoid past mistakes?

Reuters has the story:

LONDON, Feb 27 (Reuters) – Standard & Poor’s has assigned a preliminary BB rating to U.S. insurer Liberty Mutual’s planned $200 million catastrophe bond, to be issued via special purpose vehicle Mystic Re II, the credit rating agency said.

In a pre-sales report published late on Thursday, S&P said Mystic Re II’s Series 2009-1 notes will transfer some potential losses by Liberty Mutual and affiliates from U.S. hurricanes and earthquakes to capital markets investors. Continue reading “News from the cat house……”

BREAKING: S&P Downgrades 10 Life Insurers. Death Rattles Reportedly Heard in Hartford Connecticut

Marketwatch has the story:

S&P said it lowered its counterparty credit and financial strength ratings on 10 groups of U.S. life insurers, and its counterparty credit ratings on seven U.S. life insurance holding companies.

“In response to the extreme pressures in the global economy, we recently published criteria that outlined the incremental stress analysis we are now applying to U.S. insurers’ bond holdings, commercial mortgages, and commercial mortgage-backed securities when we assess these companies’ capital adequacy,” S&P said.

The ratings firm added that, “Although today’s rating actions reflect our opinion of a general decline in the overall creditworthiness of the U.S. life insurance sector, we continue to believe the credit fundamentals of the life insurance industry are strong.”

Insurers affected by the ratings changes include Conseco Inc., which saw its counterparty credit rating cut to CCC, denoting very weak security characteristics. Genworth Financial Inc. saw its rating cut to BBB, denoting good but more likely to be affected by adverse business conditions than higher-rated insurers, while Hartford Financial Services Group Inc.’s rating was cut to BBB+

The S&P report, which can be found here if you sign up for a free account has many salacious tidbits backing what I’ve been saying for several weeks now on a topic we’ve blogged about for months beginning with Senate Majority Leader Harry Reid’s welcome here last fall. Here are some excerpts:

Standard & Poor’s also said that it placed its ratings on two groups of U.S. life insurers, one of which was also downgraded, on CreditWatch with negative implications. At the same time, Standard & Poor’s revised its outlook on an additional U.S. life insurer to negative from stable……………. Continue reading “BREAKING: S&P Downgrades 10 Life Insurers. Death Rattles Reportedly Heard in Hartford Connecticut”