Slabbed news miscellany: AROD remanded without bond. Backlash against government subsidized property and casualty insurers. UPDATED with scoop from the Ladder – Dr. Van Heerden filing suit against LSU!

We have so much going on here at Slabbed right now we could literally spend all our waking moments authoring posts on the various topics we’re covering but since Nowdy, Bam Bam and I all have day jobs that won’t happen. In order to save a bit of time I’m combining today’s other news in one post thus the title. Nowdy will be along later to chip in her two cents.

We start with a reader tip on Ashton O’Dwyer, a troubled man who now is in deep trouble. He has been remanded to federal custody without bond. Hopefully he is also being pumped full of meds and receiving some badly needed counseling.

Next up and certainly in keeping with today’s theme of folks that are delusional, here is a story from the National Underwriter on that Property Casualty Insurers Association of America meeting held last month in San Antonio which we began profiling yesterday. This report, written by my main man Sam Friedman, covered the remarks of David Sampson, president and chief executive officer of the Property Casualty Insurers Association of America. Here are some excerpts:

Property and casualty insurers could easily be trapped in the “wave of political populism” sweeping the country in the wake of the nation’s economic and leadership crises, an insurer association leader warned.

“Many may believe that because people are so focused on bashing the bankers and Wall Street that the public and politicians will leave insurers alone, but I am not so sanguine,” said David Sampson, president and chief executive officer of the Property Casualty Insurers Association of America.

Of course Mr Sampson is not so sanguine as he certainly is aware the public is paying attention even though his script is not based in any sort of reality as we continue:

Once you start a prairie fire, it’s hard to control,” he added, speaking here last week at PCI’s Executive Roundtable Seminar.

“The first order of business will be attacks on health insurers,” following the inability thus far of Democrats in Congress to get a health care reform bill to President Barack Obama’s desk, he said. “But it’s a very short leap to the rest of our industry. Our research has confirmed that most people don’t make a distinction among the various sectors of the insurance industry.”

Here on Slabbed we’ve made that distinction and have shied away from covering health insurers, especially since their ranks have not included TARP recipients as has the property and casualty side. Yeah, I know all the shills like Mr Sampson and his ilk at the various trade groups like to say no P&C insurer has received TARP but they also have evidently never heard of a company called AIG or the Hartford, both of which would gone bankrupt had it not been for the taxpayer subsidies they’ve received. The cruelest cut of all is that our children and grandchildren have been stuck with that bill as AIG will never be in a position to pay back the billion of dollars they received as we continue:

Public anger at the financial sector could result in a broader attack against the insurance industry, according to Mr. Sampson, noting that nothing was off limits, including auto and homeowners insurance pricing, the use of credit scoring in underwriting, tort reforms, federal antitrust protection under the McCarran-Ferguson Act, as well as flood insurance.

“Short-term extension of the National Flood Insurance Program is not ideal, but we could be extremely vulnerable if they ever do open this up for debate,” he said. “The fundamental structure of the NFIP could change if calls for reform are taken to their extreme.” Some would like to expand the flood program to cover wind-related risks, for example, he noted.

Certainly property and casualty insurers will be vulnerable when the NFIP extension is openly debated in congress. We’ve presented boatloads of evidence that private, for profit insurers used the NFIP as their personal piggy bank for years and in the case of Katrina dumped their wind claim obligations on the taxpayers. Estimates contained in the Branch False Claims Act suit in Louisiana for example estimate that as much as $9 billion dollars of the NFIP deficit was caused by wind claims dumping so it certainly is a no brainer insurers want to circumvent the democratic process and keep their bad behavior ensconce behind closed doors but as we detailed yesterday that is not going to happen as we continue:

Mr. Sampson said that the growing political populism in this country is being driven by economic uncertainty and leadership instability.

He cited various polls showing that the majority feel the country is on the wrong track, that Congress is doing a poor job coping with the country’s economic woes, and that President Obama’s approval ratings have fallen below 50 percent.

Sure it is and rightfully so. Mr Sampson evidently thinks the public should be happy and gay that taxpayer money is again being used to pay bonuses to the AIG employees that imploded the company in the process sticking our children and grandchildren with the bill for their unbridled greed. IMHO such thinking is that of a dead-ender and the public abandoned Obama quick after it became clear he too was cuddled up with the Wall Street crowd (including his home state insurers Allstate and State Farm)  that bled this country white as we continue:

He said dissatisfaction with soaring deficits and “overreaching” by government into the private sector had turned independent voters—who he called “the fulcrum of the American electorate”—against the Democrats in Washington and in their home states.

Such repercussions are likely to continue to have an effect this November, he predicted, especially given the likelihood that unemployment will remain in the double-digits come Election Day.

“People are looking for authentic leadership—not just in politics, but in the business community as well, among consumers and investors,” according to Mr. Sampson. “People are looking to see if rhetoric matches reality and hold them accountable for doing what they said they would do.”

As a result, he said, “almost everyone is throwing out their old playbooks and calling audibles, coming up with new strategies to deal with the new realities presented by a much more engaged and angry public.”

Actually Mr. Sampson has it backwards. The public is dissatisfied with private sector business overreaching into the US Treasury after they imploded the financial system due to their greed driven penchant for taking risks that were designed only to enrich themselves. And of course we’re also angry with the political crowd these Wall Street miscreants bought lock stock and barrel that prevented any sort of meaningful regulation that might have averted the disaster. Rest assured us unwashed masses are also calling audibles to counter these self serving crooks from ever getting their hooks in the US Treasury ever again.

sop

Dr. Ivor van Heerden to Sue LSU over dismissal!

A lawsuit against Louisiana State University and university officials alleging a campaign of harassment and the wrongful termination of a well-known professor and hurricane expert for his outspoken criticisms of the U.S. Army Corps of Engineers for levee failures after Hurricane Katrina will be filed on Wednesday, February 10 in Louisiana state court.

The professor, Dr. Ivor van Heerden, his attorneys and several supporters will appear in a news conference to discuss the allegations against the university. Among those supporters scheduled to speak is Sandy Rosenthal, Founder of Levees.org. Updates of other speakers as available.

The news conference will be held at 11:00 a.m., Wednesday, February 10 at the Westin Canal Place, Magnolia Room (3rd Floor), 100 Rue Iberville, NOLA.

Way to go Editilla!

8 thoughts on “Slabbed news miscellany: AROD remanded without bond. Backlash against government subsidized property and casualty insurers. UPDATED with scoop from the Ladder – Dr. Van Heerden filing suit against LSU!”

  1. Ashton now is represented by federal public defender but, not only did the court not set bond, he will have to pay $500 per month for the legal service starting in March. His docket shows the financial affidavit he filed to qualify for the service and a request to issue five subpoenas – but nothing to indicate he is getting any sort of counseling or medical attention.

    Moving from “a troubled man in big trouble” to “a troubled industry in big trouble” and the remarks of David Sampson.

    When I read Sampson’s remarks, I thought of Sup and Linda – and all the other good people associated with an industry that has IMO betrayed the trust of its employees and customers.

    It is also my opinion our nation’s leadership, such as it may be, needs to lace up its sneakers and make the “short leap” from health to property insurance.

    It’s the process, not the product that needs regulation. Maybe we need to print “It’s the Process, Dummy” tee shirts!

    Bottom Line: When an industry is run by people who think nothing of dumping on taxpayers whatever puts its profit at risk, its name doesn’t matter.

    There is absolutely no difference in the process of dumping the health care cost of our elderly and vulnerable adult population on Medicare/Medicaid and dumping the cost of wind damage from hurricanes on the NFIP .

    Sampson understands “that most people don

  2. I wouldn’t be so quick to compare Sampson with Sup or Lynda. Not only is that an insult to those 2 fine people it elevates a common, paid shills to a level of respectability that is simply not there.

    The best way to get the attention of a US Senator is to show up carrying a big bag of loot just like the insurers do.

    sop

  3. Thanks for the compliment (I think). I don’t know Mr. Sampson, his qualifications, etc. But, like most association presidents, his claim to fame is more likely to be his fund raising skills as opposed to technical aspects of the P&C business. However, I’m not as sure as you that he is dramatically understating the P&C industry and whether it has taken any TARP money. As you know, AIG owns many, many diverse businesses. And, as you know, it was the financial services business segment NOT the P&C side that caused the company’s meltdown and that was the benficiary of government bailout money.

    As for private insurance allowing the federal flood program to pay for obvious flood damage instead of volunteering to pick up the tab for coverage for which we had never received any premium, I still contend, that’s the way it is supposed to work. YOU still believe that wind destroyed these houses before the storm surge. I believe the storm surge is what destroyed them. And YOU can’t prove that “the wind came first” anymore than I can prove that it didn’t. But, you shouldn’t have to. And neither should I. The federal flood policy was designed – and intended since creation – to cover these losses. The HO policy was NOT. And, no. I’m not “moved” by any court’s decision to ignore valid contract language, be it an insurance contract or any other kind. Furthermore, I think that, since the court has rewritten contract language years after the fact, the insurance company should be allowed to conduct a retroactive actuarial study that includes the cost of the claims they orginally omitted (because they believed them to be excluded) and file for a retroactive rate change so they can get the premium they are entitled to for the coverage they are being forced to provide. I mean, everybody just wants to be “fair”. Right?

  4. Thanks Nowdy for the compliment.

    I am appalled the Feds bailed out AIG. It was their choice, the industry did not hold a gun to their heads. I was talking with an agent today who said their Commercial Division through Lexington is cutting prices to acquire market share. While I accept this as part of the way the insurance marketplace work, it irritates me my tax money may be financing this practice.

    It is not just AIG, it is GM and Chrysler. Do you think the pols will allow them to fail? No, because they are using our tax money to subsidize them when Ford took no money and beating their pants off in the marketplace. Let them fail also!

  5. You should take the compliment in the spirit for which it was intended as I was 100% sincere Lynda. You folks on the ground have absolutely nothing in common with Lecky King or the stuffed shirts in senior management folks like Sampson and his ilk genuflect before every chance they get.

    I do not believe wind destroyed every house before the surge came and such is not salient to these False Claims Act cases. The NFIP was never designed to pay for wind damage and the WYO insurers had a fiduciary duty to adjust mutli peril losses properly. Paying off flood and then not investigating the wind damage including ignoring engineering reports that stated wind as the cause of the damage clearly violated that duty. An objective read of the events in McIntosh along with an objective analysis of the damage patterns is all that takes to convince people of the fraud State Farm perpetrated on the government.

    As someone with an insurance background tell me how you justify Lecky King threatening to fire the first engineer that found wind as a cause of damage on McIntosh and then opinion shopping engineers until she got the answer she wanted. This goes way beyond manifest bad faith.

    Stay tuned for part 3.

    sop

  6. A complement was intended,however, not by comparison to Mr. Sampson. Instead, I was thinking how the industry has managed to find itself in the position he described despite the hard work of so many good people.

    I followed one of our Twitter followers who works in the industry and found this in a post on her blog

    “So much changed that day. The battles that would lie ahead for the insurance industry would change history. You see, I had been in the business of claims for so many years that I sincerely believed, and still do to a certain extent, that we were the

  7. First off: this post Smokes! And it ain’t Lucky Strikes!

    OK, UPDATE ON THE IVOR VAN HEERDEN
    LAWSUIT PRESS CONFERENCE:
    Among those supporters scheduled to speak is Sandy Rosenthal, Harry Shearer, Jed Horne, Marc Levitan, John Barry, Oliver Houck and more… Showtime TOMORROW!
    I mean, this is starting to look pretty heavy.
    And I have it on good word that media savvy levees.org has hired their own AV krewe to cover this so perchance later we will have some great visuals.

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