Louisiana Citizens CEO John Wortman has “no class”

Do you suppose that before Citizens CEO John Wortman went whining to the Legislature he gave so much as a thought to solving his problem by paying claims with the time period required by state law?  The Shreveport Times has the story under the misleading headline, Citizens wants to discourage class actions.

Louisiana Citizens Property Insurance Corp. will push for a new law protecting it from being penalized for paying claims too slowly.

Now, headline aside, that’s the story.  However, you can’t blame the misleading headline on the reporter when Citizens general counsel, Suzanne Dondeville, intentionally provided the misleading spin.

Such a law could remove a major incentive for class-action lawsuits, such as the ones that were filed against the property insurer of last resort following hurricanes Katrina and Rita.

Last year, a state district judge in Gretna ordered Citizens to pay $92.8 million to 15,573 policyholders whose Katrina claims were not adjusted within the time period required by state law.

The current law calls for a penalty of $5,000 per claim. Citizens general counsel, Suzanne Dondeville, told the insurer’s governing board Thursday that eliminating the penalty would mean lower fees for plaintiff attorneys, giving them less reason to file class actions.

No, no, no Ms. Dondeville, if you want to “lower fees for plaintiff attorneys”, just follow the law.  Works every time. Continue reading “Louisiana Citizens CEO John Wortman has “no class””

Slabbed takes the Regulatory Challenge Part 3: Incompetent is as incompetent does. Tim Geithner and Peter Principle.

The Peter Principle is the principle that “In a Hierarchy Every Employee Tends to Rise to His Level of Incompetence.” It was formulated by Dr. Laurence J. Peter and Raymond Hull in their 1969 book The Peter Principle, a humorous treatise which also introduced the “salutary science of Hierarchiology”, “inadvertently founded” by Peter. It holds that in a hierarchy, members are promoted so long as they work competently. Sooner or later they are promoted to a position at which they are no longer competent (their “level of incompetence”), and there they remain, being unable to earn further promotions. This principle can be modeled and has theoretical validity.[1] Peter’s Corollary states that “in time, every post tends to be occupied by an employee who is incompetent to carry out his duties” and adds that “work is accomplished by those employees who have not yet reached their level of incompetence”.

The Peter Principle is a special case of a ubiquitous observation: anything that works will be used in progressively more challenging applications until it fails. This is “The Generalized Peter Principle.” It was observed by Dr. William R. Corcoran in his work on Corrective Action Programs at nuclear power plants. He observed it applied to hardware, e.g., vacuum cleaners as aspirators, and administrative devices such as the “Safety Evaluations” used for managing change. There is much temptation to use what has worked before, even when it may exceed its effective scope. Dr. Peter observed this about humans. Continue reading “Slabbed takes the Regulatory Challenge Part 3: Incompetent is as incompetent does. Tim Geithner and Peter Principle.”

Breaking News: Some Bullshit Happening Somewhere

Rather than write about all the bs that interfered with my writing a post for today, I borrowed this from the American Zombie.

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