Sun Herald reporter Michael Newsom reported the current current status of insurance legislation pending at the Capitol in House OK’s Compromise:
House Bill 563 passed in a 107-7 vote Wednesday, which included all South Mississippi representatives voting for it. The measure is the lone surviving piece of Hurricane Katrina insurance legislation. Several other insurance bills, which Coast lawmakers file annually, died with a Feb. 2 deadline to clear committee. Coast lawmakers have said the insurance industry carries much influence over the Legislature, which has contributed to the bills failing in the years since Hurricane Katrina.
However, House Bill 563, the subject of Sop’s recent post Watered down policyholder legislation still hanging on in the Mississippi Legislature, passed the House with language Sop claimed would give insurers “free rein” still in the bill:
In addition to the rights that are specified by the commissioner and the provision regarding reasonable time frames, the Mississippi Homeowners Insurance Policyholder Bill of Rights must include the following provisions: (a) 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…(emphasis added)
Keep in mind that Sop is a CPA who knows “adjusting claims has nothing to do with “actuarial principles” and his related opinion is as worthy of consideration as that of those in other professions commenting on proposed insurance legislation:
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.
Sop spoke for SLABBED when he pointed out the red flag language in House Bill 563 and I saw no need to add more until I read this paragraph in Merlin’s related post this morning:
I am certain many may think these efforts are a waste of time because the insurance lobby in Mississippi seems to be in control of the political process. Standing up for the right principle and social policy is always the right thing to do. Like water in a stream relentlessly influencing the earth, just social policy reflected in law will eventually happen. But this will occur only so long as we stand up to those with more significant wealth or power that are attempting to keep the unjust status quo in place.
It is not the strength of the insurance lobby that concerns me. Instead, my consideration is framing insurance legislation as a matter of “social policy” when the “unjust status quo in place” is a matter of “public policy”. The distinction is important.
Public policies are generally accepted as “the body of principles that underpin the operation of legal systems” of state and federal government. Social policy, on the other hand, would be comparably defined as a body of principles that underpin the social welfare of a population. Unlike public policy principles reflected in governing laws, social policies are much broader and reflected in the operation of both public and private entities.
For example, the unjust status quo revealed by Hurricane Katrina reflected the extent to which law regulating insurance impacted the affordability of housing at all income levels, a matter of public policy. However, the lack of affordable housing need accessible to the low income population in the three hardest hit counties on the Coast reflected principles of the social policy that underpin the social welfare of our State’s low income population.
Translating this understanding to legislation, requires an examination of law governing the regulation of insurance. Other legislation may also address the social policy principles in law related to the housing needs of our state’s low income population; but, those housing needs may also be addressed in the social policy principles that underpin religious and community organizations.
Approaching insurance as a matter of social policy evokes the adage, “Don’t ever try to teach a pig to sing. It frustrates you and makes the pig mad.” Taken one step further in relevance to post-Katrina insurance issues, the adage would apply equally to pigs with or without “lipstick”.
Framing a Policyholder’s Bill of Rights as good social policy is a concept contrary to changing law to establish a more just operation of the insurance industry. In that regard, I would hang my hat on the unbridled authority vested in the state’s insurance commissioner. Our current public policy provides no oversight other than court rulings resulting from litigation. Moreover, it is this lack of oversight and unbridled authority that empowers the insurance lobby.
Consequently, it was only after Katrina that the public became aware of the Commissioner-approved change in the terms of insurance policies that attempted to overturn establish law on causation. Whatever process was in place for reviewing the proposed change in policy language was so ineffective that even Commissioner Dale had to rely on staff research to learn when the change was made, or so he claimed.
In the three plus years it took to reach the related Supreme Court decision, untold thousands of Katrina cases were settled and litigated and some number never reached that point because the policyholder had no resources available for any option other than accepting the claim was denied. The only way to address this unjust status quo is to change the principle of underpinning public policy to one that demands oversight and pass related law establishing same and limiting the unchecked authority vested in the commissioner.
While SLABBED commends the initiative of Kevin Buckle and the support provided by Amy Bach and United Policyholders, “standing for the right principle” is only the right thing to do when insurance legislation is rightly recogonized as a matter of public policy, albeit one with implications for the social and economic principles that underpin social policy in our State.