This past week on Slabbed has been nothing short of extraordinary as Nowdy’s post on Katrina’s Who Dat Judge Martin Feldman went national and our site traffic went into the stratosphere despite not being credited with breaking the story in the press with the exception of Anita Lee at the Sun Herald. In the middle of the mayhem, we were contacted by Debbie over at the Dimechimes Adjuster Information Blog asking for our take on the problems in the BP claims process. She also mentioned Louisiana Insurance Commissioner Jim “Jimbo the Clown” Donelon, which at Slabbed is like throwing red meat to a pack of hungry dogs.
Jimbo has been a frequest topic through time here at Slabbed as he is a wholly owned by the insurance interests he is charged to regulate. He can spout the party line from the shills over at Insurance Information Institute chapter and verse and he presides over the most expensive insurance market in the country while doing little to change it. He is a pal to Mississippi’s Insurance Commish Mike Chaney, another hollow man / career politician that is similarly wholly owned by the insurance industry. Simply put both these guys are accomplished at going on camera and spouting bullshit as gospel but in no way shape or form serve the citizens that elected them.
Before we get to BP claims some air clearing is in order. In some circles Slabbed has the reputation of being anti-business and anti-insurance though that could not be further from the truth. In real life I am the embodiment of the small business person and proudly belong to the local Chamber of Commerce. Politicians like to spout off at the mouth at the importance of small business while serving their paymasters in big business, a topic we’ve frequently called bullshit on. We’re also not anti-insurance though we take great exception to the new fangled way the large retail insurers adjust their claims as well as the way certain insurers defrauded the National Flood Insurance Program after Katrina. We’ve been privileged to get to know several folks in the industry like our own Supsalemgr who has written a couple of guest posts for Slabbed that may not agree with everything we write but who also understand we have raised legitimate issues that need to be addressed. Debbie falls into that group so when she asked for our take on the BP claims process we are very happy to help.
So here is the deal. BP hired a large adjusting outfit, ESIS to handle the many claims of the commercial fishermen and small business impacted by the spill. ESIS is a subsidiary of ACE, a company connected to disgraced former AIG CEO Maurice Hank Greenberg, that did not have a footprint in this area. ESIS in turn hired Worley Catastrophe Services, a local company based in Hammond to help staff the BP claims centers. And of course the process to date is best described by the acronym FUBAR.
So how does Jimbo the clown and his sidekick Mikey the cook play into all this. Easy, BP is self insured so the claims payments are akin to an insurance company paying for damages after a natural catastrophe so this clearly falls under their regulatory charge. We’ve had so much going on here this topic fell by the wayside for us but there has been plenty of news on the topic. Jonathan Tilove at the Times Picayune wrote about potential problems in the BP claims process on June 14th. That story had a link to the ESIS website which states:
For more than 75 years, Recovery Services International, Inc.® (RSI) has been providing superior recovery management services with the goal of reducing our clients’ loss dollar payouts. When you choose RSI, you can be assured that not only do we specialize in recovery services, but it’s the only thing we focus on. Our goal is to improve profitability for our clients, and we accomplish this by providing you with an array of recovery resources. With RSI, we can offer you our expertise in handling all lines of P&C and A&H recovery, and you can expect to receive highly flexible service delivery models that are aimed to reduce your loss costs.
Is it any wonder the people going through the process are complaining about ESIS? On June 18th an AP story cited the House Judiciary committee that less than 13% of the oil spill related claims have been paid. ABC news profiled a woman on Grand Isle that had her car repossessed and was walking to work as her husband’s BP claim had literally languished for weeks and detailed problems in the BP claims process in detail.
I mention all this because earlier this month Debbie wrote a blog entry in the form of an open letter to Thad Allen which repeated street talk that ESIS had instructed Worley not to hire adjusters with Exxon Valdez experience. I’ll add my own experience moderating this blog is that inexperienced adjusters are a large reason insurance companies get sued for bad faith and does not count insurers like State Farm purposely mis-training their adjusters to dupe their insured after Katrina, something that surfaced time and again in deposition after deposition including the video depositions Nowdy embedded in a post last month. Worth noting is that Commish Mike Chaney’s examiner found all of this in his State Farm market conduct study but he ignored his own examiner’s findings and instead ripped the two brave women who blew the whistle on State Farm in his conclusions section. It was not a surprise that just a few months later, Lee Harrell, the ethically challenged lawyer that was Chaney’s right hand man who oversaw the MID Market Conduct Study joined a law firm that does a lot of work for State Farm a few months after Chaney’s market conduct study was released. Chaney, predictably is completely MIA on the problems with the BP claims process here in Mississippi but you gotta give the man some credit because he’s figured out that hiding is better than talking unlike Jimbo the Clown who is so full of shit a turd comes out every time the man opens his mouth and this brings us to Chip Merlin’s blog.
Chip is a consumer lawyer who specializes in insurance issues and his law blog has been very good to Slabbed through time. Since Chip is a lawyer he says his piece a bit nicer than we do on Slabbed but the message is the same: Jim Donelon is once again asleep at the switch. Here is a snippet from Chip’s entry on this subject:
Dan Reynolds, from the insurance industry on-line news, Risk & Insurance ran a story, La. Insurance Commissioner, ESIS Deny Claims-Hiring Rumor. He did a terrible job investigating the facts if he wanted to get it right. He helped BP white wash an investigation of the claims process by interviewing only Donelon and then the company in charge of the process, ESIS. He failed to do what any reasonable junior investigative reporter would have done–dig for the other viewpoint and their information. As such, the story is a sham and reflects poorly on an insurance industry news publication that people should be able to rely upon for accurate information.
My mind is open to the possibility my writing style is rubbing off on Chip. 😉
Chip is telling it like it is though and in that Risk & Insurance story Jimbo the Clown shows his ignorance to everyone. I quote:
Donelon said that members of his staff have investigated some BP-related claims centers throughout Louisiana.
“We have done some visits to claims centers and found them to be operating smoothly, but that is not all of the claims centers and I do not know how many adjusters there are.” he said.
A surge of complaints would trigger an examination of the claims operations, Donelon added.
There you have it guys nothing to see here per Jimbo. BP, ESIS and Worley are doing a swell job. He tells a few whoppers too as I continue:
Donelon said his department has become skilled at knowing when claims are mishandled given the department’s experience of settling claims related to hurricanes Katrina and Rita in 2005.
“We had a million claims in connection with Rita and Katrina five years ago, so yeah, we do know when things are not being handled as they should be, I believe, and we are knowledgeable and experienced and staffed enough to monitor this situation from an insurance regulatory perspective, no doubt,” he said.
Leaving aside for a minute Jimbo told his former friend Bob Weiss to drop his lawsuit against Allstate and take the pittance they were offering him because there was no way he could win in court against them I doubt Jimbo the Clown would recognize insurance bad faith if it bit him in the ass. The ignorance he displays on the problems in his own state are stunning and unfortunately typical of the man. As for a trade magazine which takes advertisement from ESIS mangling the story such disconnect from reality has been well documented here at Slabbed. There is little news at those rags that one can’t find in a III press release though we do enjoy Sam Friedman’s blog which occasionally has some good insight.
I am certain as the BP claims process unfolds we’ll have more on the topic. For now we hope Thad Allen takes Debbie’s suggestions to heart and that ESIS and Worley tighten up and process the spill related claims promptly and with the utmost professionalism. We can hope anyhow.