I have a trio of stories from last week’s Sun Herald on the efforts to pass consumer friendly insurance legislation this legislative session. Regular Slabbed readers know that consumers have not had much of a chance in our special interest owned legislature but there are some signs that we must be closing in on an election year because a watered down policyholder bill of rights finally made it out of committee in the State House of Representatives as the Sun Herald’s Michael Newsom explains:
The state House Insurance Committee passed a compromise version of the “policyholder’s bill of rights” Tuesday, which kept the bill alive ahead of a legislative deadline to clear committee.
But if the bill passes the full House, it may face long odds in the Senate Insurance Committee, which hasn’t taken up similar post-Hurricane Katrina insurance reform measures.
The House Insurance Committee passed House Bill 563 unanimously. It would put into law language from a court decision that says the burden of proof is on the insurance company to prove an exclusion in a policy applies to a claim. The bill also requires insurers to notify homeowners if they intend to increase the premium by 10 percent or more, by sending written notice of the increase 30 days before the renewal date, among other provisions. If the company doesn’t send notice in time, the policy renews at the same rate.
This next bit of language left me scratching my head and makes me wonder how low the cumulative insurance IQ of the State House of Representatives is because adjusting claims has nothing to do with “actuarial principles”:
The measure also says “unless based on sound actuarial principles, an insurance company may not treat a policyholder differently from other individuals of the same class and essentially the same hazard when evaluating a claim.”
Taken at its face that language essentially gives an insurer free rein to do whatever the heck they want provided they pay a shill like Robert Hartwig enough to concoct some whopper actuarial principle to justify why it is OK for an insurer to hose a policyholder on a claim. Given that everything else save the renewal notifications are already solidly based in the law I’m not so sure Ol’ Buck Clarke wouldn’t be doing us a favor by killing HB 563. Perhaps Kevin Buckel will stop in to explain the meaning of that language because as it stands under the law there is no justification for an insurer to treat its claimants differently period. That said you gotta give mucho props to Kevin for pushing the Bill of Rights as we continue:
Kevin Buckel, of Long Beach, who lost his home to Katrina and battled with his insurance company, has been fighting for reform the last few years and has been frustrated because legislative committees typically don’t discuss the measures during meetings before they die. Last week Buckel threatened to stage a sit-in at the office of House Insurance Committee Chairman Rep. Walter Robinson, D-Bolton, but he backed off when Jones notified him the committee might take up the bill before the deadline Tuesday.
Next up is a hazard mitigation credit bill that left me scratching my head. Michael Newsom also filed that report for the Sun Herald:
An amendment that passed the state House on Thursday would allow the insurance commissioner to give discounts to homeowners who build their homes using strong construction techniques.
An amendment offered by Reps. Dirk Dedeaux, D-Sellers, and Scott DeLano, R-Biloxi, was adopted in a voice vote as part of House Bill 1032, which deals with a hurricane damage mitigation program that the state wants to undertake. The bill passed the House. Dedeaux said the amendment allows the commissioner to set stronger building codes for homes to make them more resistant to storms, and if homes comply with those standards, the homeowners would be eligible for a discount, which the insurance commissioner would determine. Dedeaux said it would apply to both policies offered through insurance companies, as well as policies in the government-backed wind pool, which is the insurance of last resort for those who can’t get coverage from the private sector. The two said they haven’t spoken with the commissioner about their amendment yet.
“We want the insurance commissioner and the insurance companies to know how important insurance is to the Legislature,” DeLano said.
Does anyone else wonder why these two gents did not discuss this with our Commish before offering the amendment? I am not so sure there isn’t a story behind this story, stay tuned.
Finally we have another editorial from the Sun Herald, one that I could not resist from commenting upon as once again we have a newspaper giving the perps 50 lashes with a soft pillow on their Oped page:
Nothing, they say, is dead in the Legislature until it is pronounced dead, dead, dead.
So the Tuesday deadline for getting legislation out of committee and onto the floor of a legislative chamber should not be the end of proposals attempting to make insurance more affordable and accessible and insurance companies more accountable.
This is the fifth post-Katrina regular session of the Legislature. Yet there are still lawmakers who do not appreciate how desperate the situation remains in South Mississippi. For many Coast residents, the cost of insurance has consumed so much of their household budget that there is precious little left for anything else — a fact that lowers their quality of life and weakens the Coast economy. For those and others, the cost of insurance may yet force them out of their homes. And for still others, the cost of insurance remains the primary hindrance to building, rebuilding or selling a home.
These Mississippians deserve a full examination of their plight by the entire Legislature, and shame on any committee chairman who denies them that.
sop
All the policyholder’s bill of rights does is add a few more pages to the policy that you are never going to read anyway. It does nothing but kill a few more trees. EVERY SINGLE ISSUE covered by the policy holder’s bill of rights is already addressed, in detail, in the policy. Just read it! It’s all there. And stop complaining about the fact that the policy is “too complicated”. It doesn’t have to be…and WOULDN’T be if we didn’t have to keep adding stuff to keep tort lawyers at bay. Case in point: we USED to be able to cover “sudden & accidental” pollution damage. That is, until some lawyer decided the terms “sudden” and “accidental” were ambigous. (Yeah. Right. And how many different definitions do YOU have for these terms??) So, we first tried to fix it…by adding two or three LONG paragraphs containing every word we could find to “clarify” what we meant by “sudden” & “accidental”. Hell, we even got challenged by whether it was sudden AND accidental or sudden OR accidental. (What did we SAY??) But, no matter what we said or how we said it, lawyers STILL found ways to try get around the OBVIOUS intent of the policy. So NOW, we have no choice but to exclude ALL pollution AND we have to use an entire page of paper to do it. Same thing with the HO policy. It’s wasn’t enough to simply say that we exclude “water damage”. We have to use an entire paragragh to explain what “water damage” means. It’s damage caused by H2O, dammit! How hard is that? Whether the H2O comes in the form or storm surge, or overflow of rivers, or whatever, H2O is H2O and damage caused by H2O is excluded.
Point is…either read the policy or not. But don’t continue to demand that we “give you something in writing” to explain what we already gave you…in writing.