Let's switch gears and talk Louisiana Insurance Commish Jim Donelon: A hollow man that is full of hot air.

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.

sop

15 thoughts on “Let's switch gears and talk Louisiana Insurance Commish Jim Donelon: A hollow man that is full of hot air.”

  1. OOOOOOOOOOOOOOOOOOOwweeeeeeeeeeeeeeee Jimbo the Clown had 100 million dollars to give away to liability insurance companies to encourge them to write policies in Louisiana which was supposed to create competition and slow down escalating premiuns. Well I don’t know how much money was doled out by the Clown but the premiuns have sky rocketed despite 5-10% hurricane deductibles. So I would say we need change here in Louisiana at the next state election of Insurance Commissioner! OOOOOOOOOOOOOOOOOwweeeeeeeeeeeeeeee

    1. No promises about your side of the line George but I look foward to taking Chaney’s bogus conclusions in his State Farm market conduct study and shoving it right up his ass next year.

      sop

  2. Sop,

    Thank you for reviewing the comments by LA Commissioner as I was really taken by surprise at the comments made in the Risk & Insurance article. The national news is covered with nothing but problems residents in our four coastal states are encountering so I was amazed to hear that Louisiana had no complaints according to the quotes they put in that article.

    I can also assure you that no Insurance Commissioner would allow an insurance carrier to have such delayed contact with insureds at the time of a hurricane or mass disaster so his comments were also quite a surprise in that regard as well.

    Knowing that Slabbed had extensively covered claim litigation during Katrina, I thought you’d be the folks who knew the background on Donelson and the comments made in the article link I asked you about.

    The links you give in this article are very informative and I thank you for taking so much time providing clarification on why such comments would be made. It certainly makes more sense now.

    Worley by the way is an outstanding adjusting firm. Like all adjusting firms, they can only deploy the number of people they are alloted by the insurance company and they must follow claim settlement procedures as well according to the guidelines given to them. I believe the problems are due to the enormous political circus and hands on involvement of so many agencies probably interceding in what Worley knows how to do well which is settle claims. But they can only settle claims when given the authority to do so.

    Again, thanks. I look forward to your follow up articles on this. By the way- also thanks to your guest blogger who wrote the NFIP article. That was excellent as well.

  3. Folks I think we need to remember how many people were given a fair settlement after Katrina. If the sentiment is to throw out all the carriers then the citizens of the state will become “self-insureds”. The states have no money. The private insurance sector is needed in the Gulf South.

    The price will never be inexpensive because history indicates the need for adequate premiums based on the history of storms from the Gulf of Mexico. The premiums are reflecting prior loss experience and the cost of reinsurance. Make no mistake that the cost of reinsurance gets passed along to the ultimate consumer and always will.

    I have no high level knowledge of the Insurance Commissioners in LA or MS. However, I know the situation and they have a tough job. Consumer concern by them is not limited to cost of insurance. A bigger issue is “availability” of insurance. It doesn’t matter how much it costs if it’s not available. Suppressing rates will deprive the citizens of the Gulf South any options.

    My personal opinion is the position of Insurance Commisioner should be an appointed postion. It is not a political postion, but one of expertise. The problem with this option is how political is the governor who makes the appointment.

  4. OOOOOOOOOOOOOOOOwweeeeeeeeeeeee Dear supasalemgr: If the insurance companies would have been upfront and honest from the start most of us would have a different outlook and opinion of them. Let me ask you to honestly first answer if you were unslabbed before you voice your opinion on this blog site any further. And if you were unslabbed and like to pay higher premiums than you must also like to pay more taxes. So next time i get a 20% increase in my premium which already has a 10% hurricane deduction I’ll ask you to help me out here in the rainforest.Right ? Have a nice day but watch for falling banana peels. OOOOOOOOOOOOOOOwweeeeeeeeeeeee

  5. Curious, your comment insinuates all claims were handled improperly which is just not the case. My comments regarding premiums as related to experience and exposure are statistically sound. I accept there may be some arguments concerning which models are utilized. However, the fact remians that as long as people choose to live in coastal areas the premiums will be higher than those for folks not exposed to hurricanes. The utilization of hurricane deductibles are tools to maintain viable markets in coastal areas as population and values increased.

    1. A few thoughts. First you missed the point of the post Sup. There are documented problems with the BP claims process and the regulators have their heads stuck up their ass. This is not unusual as such is a chronic condition with most all the State Insurance Commissioners. Jimbo the Clown said he looked and everything is fine. Maybe he missed the ABC piece on the lady having to hoof it to work because BP had not done anything with her Hubby’s claim.

      Second we’ve well docuemented the problems with the bogus modeling, cost of capital, sham reinsurance transactions and the like more times than I can count. The process by which insurers set their rates is not transparent and it is that way for a reason. People are tired of being price gouged for less and less coverage.

      As to the way Katrina claims were handled you are right, many claims were processed without a problem. Those would be the smaller roof claims which were the overwhelming majority of the Katrina claims. But where the claims involved the big bucks and majority of dollar exposure, insurers dumped their wind obligations on the NFIP and denied the related wind claims. I dare say most everyone down here knows one or more people that were hosed that way after Katrina. It also explains why a former LSU kicker was booed off the field during the Allstate portion of the Sugar Bowl halftime show a few years back in the LSU-Ohio State National Championship game.

      Jim Donelon and Mike Chaney do not serve the interests of the people that elected them and I think this post well illustrates it.

      sop

  6. True story about Jimbo.

    He works out at the same health club as me. So about one year into Katrina homeowner’s insurance litigation I approach him and inform of the non-sense State Farm is arguing on a seven figure claim relative to its mold exclusion. After I opposed a SF motion by providing the court with SF’s own documents showing their position was baseless, SF withdrew the motion befor eit could be heard.

    Anyway, I ask Donelon why the Dept. of Insurance approved such a non-sensical exclusion, at least to the extent SF was attempting to expand the exclusion as argued post-Katrina. Jimbo responds by saying “trial lawyers had guys in space suits inspecting properties……”. The clear implication was that in his opinion, trial lawyers were filing “frivolous lawsuits” relative to mold related injuries and damage. Upon him telling me that, I said “Well I’m trial lawyer and I am dealing with this non-sensical, overborad exclusion that your office approved.” His response, “Send me the materials and I’ll look at it.” He then ran off like an embarassed little turd.

    Don’t think for a minute that Jimbo has any policyholder’s interests in mind when performing his duties as Insurance Commissioner.

  7. This is one of those areas where I am going to have to disagree with you SOP; ahh, the beauty of open discussion.

    Having worked as an adjuster for Worley/SF after Katrina, I handled some significant wind/water cases (not just small, roof replacement cases). Our marching orders were to be fair, and I personally got no instruction to push claims off on flood. I would like to think that the proof of my appropriate handling of claims for SF was that I got no subpoena and gave no deposition on any of my claims that I closed. I also worked for Worley/SF in Houston after Ike, and same thing – no subpoena and no deposition.

    Now, is that to say that there are people who were not screwed by the insurers, certainly not. Having looked at some of the documents and proof that my friends in the plaintiff”s bar developed against insurers (mainly Allstate), I can tell you that there was a concerted effort, again mainly by Allstate and their high-priced, incompetent lawyers, to smear policyholders and push claims into the flood aspect of the claim.

    There are two sides to every story, but this is just my humble perspective based on my own personal experience.

  8. I mediated claims in La post-K.

    To a person every adjuster had marching orders to hold the not covered line.

    The fighting between Private Adjusters hired by property owners and the company men got physical at one point.

    The company men called Jimbo whining everytime a private adjuster showed up.

    Jimbo put in so many credentialing requirements and at one point tried to force property owners to have attorneys if they had private adjusters. And required everyone to be at every meeting.

    Conversly the company men could come in without files, without settlement authority beyond a pittance and Jimbo did nothing

    And any Mediators who tried to hold the company mens’ feet to the fire found themselves getting fewer and fewer mediations. The company men also were allowed to ‘ pick ‘ their Mediators. And eventually those Mediators got Jimbo to let their companies do the mediations outside the Ins Dept. system at the Mediation Companies private offices or counsel offices. Effectively removing any Ins Dept oversight of the mediation process. These Mediation firms rely on the Ins companies for business outside of disaster mandated mediation so the playing field was never level with them. Only the independent non-affliated Mediators can be truly objective. So word to the wise: Plaintiff lawyers demand to know if the mediator the other side wants or the Government assigns has any business interests entertwined and in conflict.

    They really do try to get you coming & going.

    I prefer the company of sharks. At least I know what they are.

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