Merlin: Insurance industry is using the “letter of the contract” to defeat the promise they sell

Here are two new posts on Merlin’s blog that are a great fit with Sop’s View from the trenches on the disconnect at the National Underwriter –Leading Insurance Academic Proves State Farm Accepts “Reasonable Expectations” of Insurance Coverage and Insurance Advertisements Stress an Expectation of Coverage and Service.

Both posts go to the heart of every Katrina case – the “illusory coverage” policyholders found they were sold and told would cover loss from a hurricane.

The first, Merlin wrote this past Tuesday:

Professor Jeffrey Stempel is among the best legal writers of matters pertaining to insurance. When reading his work, I often think “why can’t I explain my thoughts so clearly and eloquently?” Maybe that is why he is the insurance law professor, and I am in the middle of legal muck and controversies.

While following up on Saturday’s Post, “Fireworks are Loved by Americans–and Insurance Companies Seeking Not to Pay Fourth of July Fires,” where I quoted Barry Zalma at length for the proposition that insurance companies often advertise one product but sell another, I came across a related article on the LexisNexis Insurance Law Center written by Stempel. His article, March Madness Makes It “Official: State Farm Embraces the Reasonable Expectations Doctrine and Rejects Linguistic Literalism, is a must read for those trying to prove that even the industry leader recognizes what it advertises is not what it sells. This is the point I was trying to make in my post, “Is the State Farm Policy Really Worth Anything?

I felt the following paragraphs best sum up Stempel’s points: Continue reading “Merlin: Insurance industry is using the “letter of the contract” to defeat the promise they sell”

A view from the trenches: Stunning disconnect at the National Underwriter

Let them eat cake

-Marie Antoinette, who supposedly uttered the phrase during one of the famines that occurred in France during the reign of her husband Louis XVI.

Human nature never changes, only the people change, the pockets change, the suckers and the manipulators change, the wars change, the disasters change, the technology changes – but the market never changes. How can it? People never change and peope drive the market, not reason, not economics and certainly not logic. It is human emotions that drive the market, as they do most other things on this planet.

-Richard Smitten, The Amazing Life of Jesse Livermore World’s Greatest Stock Trader

Emotions must be understood and harnessed before successful speculation is possible:

  • Greed – is a human emotion in all people, defined by Webster’s dictionary as: the excessive desire for acquiring and possessing. A desire for more than one needs or deserves. We do not know the orgins of greed, all we know is that it exists in every person.
  • ……but hope, like its stock market cousins, ignorance, greed and fear distort reason.

-Jesse Livermore, From his trading manual

Mr. Praline: I’m sorry, I have a cold. I wish to make a complaint!
Owner: We’re closin’ for lunch.
Mr. Praline: Never mind that, my lad. I wish to complain about this parrot what I purchased not half an hour ago from this very boutique.
Owner: Oh yes, the, uh, the Norwegian Blue…What’s,uh…What’s wrong with it?
Mr. Praline: I’ll tell you what’s wrong with it, my lad. ‘E’s dead, that’s what’s wrong with it!
Owner: No, no, ‘e’s uh,…he’s resting.
Mr. Praline: Look, matey, I know a dead parrot when I see one, and I’m looking at one right now.
Owner: No no he’s not dead, he’s, he’s restin’! Remarkable bird, the Norwegian Blue, idn’it, ay? Beautiful plumage!
Mr. Praline: The plumage don’t enter into it. It’s stone dead.
Owner: Nononono, no, no! ‘E’s resting! …

-Monty Python’s Flying Circus Season 1 – Episode 08

I was reminded of all those quotes when I read the National Underwriter’ cover story from their May 26th issue that was authored by Sam Friedman that ran under the lede “Insurers Can Polish Their Image While Boosting Bottom Line“. Sam, whose blog was one of our original blogroll links here at Slabbed, felt compelled to author a companion peice on his blog that ran under the post title “Time for Some Tough Love on the Industry’s Image” no doubt fearing backlash from the insurance industry readers that support his trade journal. Both pieces left me stunned in how disconnected from reality Sam has become, his critical reasoning no doubt clouded by the revenue generated from the industry by his trade magazine. But before we analyze Sam’s column and blog entry we need to backtrack to last year and the posts we did on Sam’s indignation with the award winning Bloomberg story that detailed unscrupulous claims practices by insurers, “The Insurance Hoax“.

Sam called the work a “hatchet job” and did his best to torpedo it’s chances of winning the Deadline Club award for which it was nominated. He couldn’t be everywhere at once though and the cream truly does rise to the top so the Bloomberg piece, along with Becky Mowbray’s insurance reporting for the Times Picayune won awards from even more prestegiouos journalism trade groups than the Deadline club.

Sam was still steamed, especially after Dean Starkman at the Columbia Journalism Review subjected the Insurance Hoax to “the Audit” and found that the piece was indeed factually based, no doubt explaining it’s wide acceptance among professional journalists. Sam however, was having none of it prefering to remain in denial. So while I at the time I admired Sam’s passion we also got a peek at the partisan Sam, the one who Journalistic skills are clouded by the monetary realities of runnig a trade journal. One comment left on Sam’s original blog entry on the Insurance Hoax nailed it dead on, just like Monte Pyton’s dead parrot skit:

Do a consumer survey, or simply talk to your relatives and neighbors, for goodness sake! Ask them if they felt whether their insurer paid what was owed them. What more “proof” do you need? Continue reading “A view from the trenches: Stunning disconnect at the National Underwriter”

Jim Brown on Bobby Jindal

You gotta love Jim, a former politician who puts his state ahead of his party. Bobby Jindal would be wise to take Jim’s good advice. sop

Thursday, July 9, 2009

Baton Rouge, Louisiana


“Whatever happened to Bobby Jindal?” That is the question posed in this month’s Economist Magazine. “At one point he was the great hope of the GOP and now we hardly hear a word about him.” So is it time to begin writing obituaries about the Louisiana Governor’s once rising nation political ambitions? Maybe not yet, but Jindal obviously has his work cut out for him.

After Jindal’s less than stellar response speech to the President’s State of the Union address, the criticism came raining down, and he all but disappeared from any national view. The conventional thinking among Jindal’s staff of advisors was for him to lay low and let the “Kenneth-the-Page” fiasco pass. Let time be the healer, and then find the right opportunity for Jindal to re appear on the national scene.

The problem for Jindal is that by not staying visible outside Louisiana, the only impressions many political observers have of him is the “Little Ole’ Bobby moment” seen by millions this past February. The Governor did have his hands full in the recently ended session of the Louisiana Legislature. But timing can be everything in politics. And with other potential presidential contenders dropping out right and left (Governors Palin and Sanford, and Sen. Ensign to name the latest), Jindal could be missing important opportunities that could lead to a revitalized stature on the national scene. Just what could he begin to do that would draw favorable national attention?

First, jump head first into the national healthcare debate. When he was running for governor, Jindal played up his credentials as a healthcare policy wonk. Continue reading “Jim Brown on Bobby Jindal”