Slabbed Lets the Cat out of the Bag: Is Allstate’s Reinsurance Program Worthless? Ask the Weeping Willow tREe.

Cat bonds that is and certainly they have been topical this week here on slabbed. Let’s begin by taking a trip back in time to the Bloomberg story we linked on Willow Re, an Allstate SPE (special purpose entity) earlier this week:

The issuer has notified Standard & Poor’s that it will not have sufficient funds to make the scheduled interest payment,” S&P analyst Gary Martucci in New York wrote in the statement.So-called cat bonds have gained popularity as a way for insurers to protect against natural disasters, and buyers demand outsized returns because they risk losing their entire investment to the insurer if the catastrophe is large enough. With Willow Re and other bonds backed by Lehman, investors are on the verge of losing a portion of their stake because of a financial calamity instead of a natural one.“The market was already pricing Willow Re in the area of 50 cents,” said Christophe Fritsch, head of insurance-linked securities at Axa SA in Paris. “New deals will improve dramatically. Investors will make sure that they will only be exposed to insurance risk and won’t take credit risk.”

Returns Guaranteed

Willow Re is one of four catastrophe bonds that used contracts sold by Lehman to guarantee returns on collateral backing the notes and to make interest payments. Lehman’s collapse in September nullified the guarantees, leaving the securities open to market value losses on the collateral. Continue reading “Slabbed Lets the Cat out of the Bag: Is Allstate’s Reinsurance Program Worthless? Ask the Weeping Willow tREe.”

Just the cat’s meow – and no Buffet to feed the kitty, plug losses if Katrina Canal Breaches Litigation moves forward

Crumpled newspaper worked on the levees but it won’t do the trick  this time – not with the cat’s meow that’s about to call attention to the Katrina Canal Breaches Litigation.

The timing of State Farm’s announced withdrawal from Florida market was advantageous – intended or not.  The story  dominated and little attention was given reports on the effort  to dismiss the Katrina Canal Breaches Litigation – an incredible coincidence.

Lawyers for some of the nation’s largest insurance companies asked a federal judge on Friday to dismiss a lawsuit filed by a former Louisiana attorney general, calling it “a bald attempt” to force insurers to increase payouts for hurricanes Katrina and Rita.

U.S. District Judge Stanwood Duval Jr. heard arguments from lawyers on both sides of the case, but didn’t immediately rule on the companies’ request for him to dismiss the class action suit filed in 2007 by former Attorney General Charles Foti.

Lawyers for Allstate Insurance Co., State Farm Fire and Casualty Co. and other insurers claim the attorney general’s office is trying to take over the rights to more than 155,000 policyholder claims, to recover money the state paid out through the federally funded Road Home homeowner grant program after the 2005 hurricanes.

But the companies say the state already had deducted insurance payments in calculating grant awards.

Which brings the story to the point where it meets the party line: Continue reading “Just the cat’s meow – and no Buffet to feed the kitty, plug losses if Katrina Canal Breaches Litigation moves forward”

Pigs fly in Hawaii Court with justice the wind beneath their wings

People who love sausage and people who believe in justice should never watch either of them being made

As a life-long lover of sausage; sometimes-disillusioned believer in justice; and intimate observer of the making of both, I’ve found times when watching sausage-making might be the less disturbing.

A hog, of course, would differ.  I might, too, if I lived in Hawaii’s First Circuit or, as it turns out, the State of Montana or the Eastern District of California – a thought I would not have considered had a reader not provided Plaintiff’s opposition to the Pro Hac Vice admission of two Gibson, Dunn and Crutcher attorneys for the Defendant, Dole from Gerardo Dennis Patrickson, et all versus Dole Food Company, Inc., et al.

Plaintiffs object to the application for admission pro hac vice of the Gibson, Dunn and Crutcher (“GDC”) attorneys based on the evidence of their firm’s record of sanctioned misconduct, misconduct that has no place in this litigation and file this memorandum in opposition.

Plaintiffs’ opposition is based on the record of the law firm of Gibson Dunn and Crutcher’s sanctioned misconduct that demonstrates a pattern and practice of abusive litigation tactics designed to conceal the truth, disrupt the orderly progression of litigation and exhaust the resources of the adverse parties. in an attempt to intimidate them and their counsel from pursuing their claims .on the merits, misconduct spawned by a culture of obstruction, gamesmanship and flagrant disregard for the authority of the Courts.

Gibson, Dunn’s record of sanctioned misconduct speaks for itself

Plaintiffs were locked and loaded when they filed their motion in opposition. Continue reading “Pigs fly in Hawaii Court with justice the wind beneath their wings”

Around the GO Zone in 60 Seconds: Drinking ‘Shroom juice at the Wall Street Journal, Cottages, Community, Warr and Wind Pool

I must be quick so I can get on the road to Buzzard Roost and there are several items that we need to cover so let’s start with the men and women on the Wall Street Journal’s Editorial board who evidently found a local source for psyclobin mushrooms (and consumed alot of tea) before they wrote this:

Mr. Crist’s behavior stands in contrast to that of Louisiana, of all places. Baton Rouge also established a Citizens insurer after Katrina but only as a “last resort.” Louisiana has a thriving private insurance market, in part because regulators have let companies adjust their rates. By law, Louisiana Citizens cannot offer competitive prices, save in a few high-risk coastal areas. From a peak of about 170,000 policies in 2007, it now holds about 130,000 (about what it had before Katrina) and is aiming to get below 100,000.

Note how these lit and hallucinating buffoons neglected to mention how many policies Louisiana Citizen’s had in 2004 and 2005 or the fact the guy running Louisiana Citizens (now under federal indictment) that entire time was paying his daughter’s prom bill with policyholder premiums.  Maybe next time they should check with Jim Brown before they have their combo mushroom binges/editorial board meetings. Since Bob Bartley died the only thing I can add about the remaining folks in opinion at the WSJ is that you guys really suck.

Watching the cottage controversy unfold from afar I shake my head at the utter uselessness of the approach taken by certain of the affordable housing advocates. Nowdy, who happens to know a thing or two about these type issues, contends in our internal Slabbed editorial board meetings very real issues are being obscured by the yet “another Thompson/Barbour pissing contest” and I’m inclined to agree and in this case I don’t blame our Gov.  It is simple economics; throwing money putting people without means into “affordable housing” does nothing to fix the larger problem.  Good paying jobs makes housing affordable. Meantime we have renters that actually work full time who are wondering where they will live when the FEMA rental assistance program ends this month. To the extent the renters work, received no grant and have no shot at a freebie cottage they have my sympathies. And since they work they can’t spend time raising cain at local City council meetings which brings us back to the “uselessness”. Solutions to thorny issues lie in the advancement of knowledge and awareness. People of goodwill can genuinely disagree but that doesn’t mean they can’t work together trying to find workable solutions to hard issues. Sometimes the politicians don’t make it easy but I’ve found both the Bay and Waveland the city councils are listening to a variety of opinions and genuinely want to do what is best for the community. Continue reading “Around the GO Zone in 60 Seconds: Drinking ‘Shroom juice at the Wall Street Journal, Cottages, Community, Warr and Wind Pool”

“but the pavement always stayed beneath my feet before…”

Some things one can never become accustom to – and boating down the street where you live falls into that category; but, that’s exactly what residents of Pacific, Washington found themselves doing on the 9th of January.

Like a growing number of businesses, they’re looking for a bailout.  In this case, however, it’s literal. h/t Editilla

The checks are being handed out to many victims of last month’s floods. But in the city of Pacific, flood victims and the mayor are restless, saying their flood was not an Act of God. They are looking for who is to blame, and who they can sue.

On January 9th, part of the town of Pacific was up to its hips in water from the White River. Over 100 homes were inundated after the Army Corps of Engineers released water from Mud Mountain Dam, which was reaching a dangerously high level during the storm.

The Corps insists it didn’t release any more water than they did during the flood of 2006, when only the city park flooded. Why the same action produced such difference consequences is still a mystery.

But now the town wants immediate relief and the government to pay for the damages…

“We are not there to make your house as livable as it might have been,” said Jack Heesch with FEMA. “Our primary response is to make that house safe, sanitary and habitable.”

That is the message for all those flooded. FEMA may replace your furnace and treat the mold. But FEMA is not insurance. It’s emergency help.

Right, FEMA is emergency help – disaster assistance – no more intended to be reinsurance for the Corps than the first responder when someone forgets to turn off their bathwater and floods their house. Continue reading ““but the pavement always stayed beneath my feet before…””