Chip Merlin’s thoughts about the federal agenda of State Farm, Allstate and Nationwide versus that of the 350-member companies of the American Insurance Association make for interesting reading on a subject much in need of a broad-based public conversation – and, Chip even offers the kick-off.
It is amazing that there has not been more investigation and calls for transparency into the major personal lines insurance companies’ discussions and agreements which may reveal such a conspiracy. While anti-trust exemptions exist for insurance companies regarding sharing of loss data for rate making and other rate or form issues, there are no anti-trust exemptions for agreements that otherwise restrain trade and competition through collusion…
Given that Allstate and State Farm are underwriting fewer coastal risks where hurricanes hit, I think it is more than happenstance that each share a common political agenda to protect market share losses as they pull away from Coastal America and try to avoid financial losses that occur from hedging the catastrophe risk themselves.
With that introduction, I yield the rest of this post to Chip and those of you who wish to comment.
It is obvious that State Farm, Allstate, and Nationwide have agreed to promote a federal agenda to keep their smaller and newer competitors from taking over market share of their cherished automobile and other insurance businesses by lobbying the federal government to enact legislation to indirectly insure property these three companies consider too risky to insure themselves.
One of the insurance industry’s major trade, lobbying and propaganda organizations is the American Insurance Association. It has over 350 insurance companies as members. Conspicuously, State Farm, Allstate, and Nationwide are not members. The American Insurance Association is opposed to federal legislation which creates a federal catastrophe reinsurance plan, while Allstate, State Farm, and Nationwide lobby for such a program. The AIA web site states:
“Among the proposals of some policymakers are federal catastrophe funds (also known as “Cat Funds”). While those mechanisms may offer short-term rate relief, they also promote unwise and unsafe property development, and leave problematic cost-drivers for insurers and policyholders unresolved.”
In a press release opposing the Federal Catastrophe Legislation, the AIA states: Continue reading “Chip Merlin on State Farm’s, Allstate’s and Nationwide’s Concerted Agenda To Stop Competition And Insure Profits”
Catching up here after the weekend with this story from the Sun Herald reporting attorney Joe Sam Owen plans to request a delay in the trial of Gulfport mayor Brent Warr.
Mayor Brent Warr and his wife, Laura, will ask a federal judge to delay their trial on Katrina-fraud charges, Brent Warr’s attorney, Joe Sam Owen, said during a hearing Friday.
The Warrs are preparing for trial the first week in April. Brent Warr has said he will run for re-election this spring, although he has not filed papers to qualify.
Owen and Laura Warr’s attorney, Frank Trapp of Jackson, both said they expect to have mountains of paperwork to review before trial.
The expected mountains of paperwork will provide the peace of mind that comes with knowing exactly what it is the government is claiming – and until the hearing last week, the Warrs and their attorneys were uncertain of the exact claims and if they’d have the information before they went to court.
Owen and Trapp had filed a Motion for Bill of Particulars, discussed here in Like a game of 20 questions, in an effort to find out the details of the charges related to the Warr’s homeowner’s coverage with Lexington Insurance.
The hearing was about four additional mail-fraud charges — “the Lexington charges,” the defense calls them — involving Lexington Insurance money paid to the Warrs…
Owen said the insurance company would not release any information to the defense. Continue reading “Warr and Peace – of mind (just a little)”
The sun will come up tomorrow and the next day. Still in all working at AIG, Swiss Re or the Hartford these days must really suck, kind of like Chinese water torture.
AIG – 60 Billion tax dollars really wasn’t enough.
ALL – Down another 7+% with a new 52 week low.
Swiss Re – See earlier post.
Hartford –Working on a new 52 week low and worse.
No Mr CLS, we don’t quite have the presidential suite ready at the Do Slabb Inn for Mr Buffett so while we wait here is a Berkshire Hathaway appitizer courtesy of the National Underwriter:
Moody’s Investors Service in London said today it has downgraded the loss-battered Swiss Reinsurance Company and its subsidiaries yet another notch.
The rating service–which on Feb. 6 had dropped the company from “Aa2” to “Aa3” (“Excellent”)–said it has now cut the firm’s insurance financial strength and senior debt ratings from “Aa3” to “A1” (“Good”) and assigned a negative outlook. Short-term ratings of “Prime-1” were affirmed.
Swiss Re’s rating problems began with the firm’s surprise revelation on Feb. 6 that it might have losses for 2008 of up to CHF 1 billion ($860 million, at current exchange rates), and that it had made arrangements to secure $2.6 billion in capital from Berkshire Hathaway and would cut back its dividend. The loss figure was changed to CHF $864 million ($736.3 million) last Friday. Continue reading “Warren is Buffeted by Moody’s Downgrade: Berkshire Cash not Enough?”