Category: Claims Handling

Breaking News – Bossier v State Farm fully and finally settled

TEXT ONLY ORDER finding as moot [198] Motion to Alter Judgment; finding as moot [200] Motion for Judgment as a Matter of Law; finding as moot [200] Motion for New Trial; finding as moot [204] Motion for Taxation of Costs; finding as moot [210] Motion to Review; and finding as moot [213] Motion to Review.

All motions are rendered moot in light of the announcement by counsel for the parties that this cause of action has been fully and finally settled. NO FURTHER WRITTEN ORDER SHALL ISSUE.

Signed by District Judge L. T. Senter, Jr., on January 12, 2010.

That’s the ballgame! No details available.

Slabbed Scoops the News: Bossier gets nothing in Phase 2

We’ve confirmed Kris Carter’s comment. On behalf of Nowdy and Bam Bam we’d like to thank Mr and Mrs Bossier for sticking with this litigation to the end. While our gratitude will certainly be of little solace to them right now perhaps in time they’ll take comfort from the greater good it accomplished. We also thank Judy Guice.  The tenacity in her advocating for the Bossiers is self-evident and indicative of the fine consumer lawyer she is.

I’ll be back with some analysis a bit later on the jury.

sop

Lets connect the damages verdict in Bossier to reinsurance, securitization via cat bonds and global finance

I sometimes pinch myself someone as financially sophisticated as Mr CLS posts with us on Yahoo Allstate. Before I get to his post there is one concept that must be understood in reinsurance. Under traditional reinsurance the ceding party (such as State Farm) gets to take a credit on their balance sheets for the risk transferred to the reinsurer for the amount of reinsurance purchased. A problem with Cat Bonds is the lack of specific attachment points in loss payments (unlike traditional reinsurance) means the collection of the cat bond trust proceeds is de-coupled from the amounts actually paid to the insureds for their losses making it possible for an unsavory insurer to both collect for losses via the Cat bonds and stiff their insureds.

So what happens when traditional reinsurance is then backed by Cat bonds for a homeonwers policy which was also bundled and sold via securitization (think life settlements)? Mr CLS asked that exact question this morning and as per usual he followed the money to Bermuda:

Securitization for HURRICANE risks ABOVE the Hurricane Storm Surge water line.

“If I couldn’t differentiate between wind and water, I could NOT pay”, said adjuster Matthew Thiele.

The final version said “When the investigation indicates that the damage was caused by excluded water and the claim investigation does not reveal independent windstorm damage to separate portions of the property, there is NO COVERAGE available under the homeowners policy.

So where is the “Transfer of risk” through securitization?

What was the “credit” taken on liability balance sheets or off balance sheets for this transfer of risk?

Would a balance sheet credit be taken (say in the securitized HO policy of Bossier) for:
a) $2,300 (the initial payment loss)
b) $93,480 (the supplemental payment 4 years later)
c) $650,000.00 (the full policy limits)

S&P rate Alpha Wind 2000-A Ltd’s $90 million

These HURRICANE securities provide $90 million of retrocessional coverage to ARROW RE, a wholly owned Bermuda reinsurance subsidiary of Goldaman, Sachs & Co. Arrow Re has reinsured a $100 million portion of an excess-of-loss treaty covering STATE FARM Group (State Farm) policies, primarily homeowners, in Florida. This securitization represents a 90% cession of that risk to the holders of the securities. Continue reading “Lets connect the damages verdict in Bossier to reinsurance, securitization via cat bonds and global finance”

Breaking News! Jury decides for Bossier – Phase II starts Thursday! UPDATED

Minute Entry for proceedings held before District Judge L. T. Senter, Jr: Jury Trial held on 11/10/2009: PHASE I COMPLETED, JURY VERDICT returned in favor of Plaintiff; Court ruled State Farm had no arguable reason for delinquency, therefore, PHASE II of JURY TRIAL TO BEGIN 11/12/09, at 1:00 P.M.; COUNSEL to reconvene in Chambers, 11/12/09, at 10:00 A.M.

I’ve been Sop’s blog partner almost two years now; and, Bossier v State Farm is one of the few cases the first case I’ve covered that has come close to trial.  In fact, the only trial other than Bossier that I recall at the moment is Lisanby v USAA.

The jury’s decision is sealed; but the minute entry tells us a jury of peers heard the evidence and decided in Bossier’s favor and Judge Senter’s ruling – no arguable reason for delinquency – set the stage for Phase II.

Congratulations to the Bossiers and to their attorney and tireless advocate, Judy Guice! Continue reading “Breaking News! Jury decides for Bossier – Phase II starts Thursday! UPDATED”

State Farm’s expert[sic] all wet: Bossier v State Farm trial update

In a written statement Monday, State Farm said “… based on the testimony of both parties, it is clear that Mr. Bossier and State Farm have different views regarding whether it was wind or storm surge that destroyed Mr. Bossier’s home.

Different views, indeed. Why else would there be a trial? It was their differing views of an expert qualified to determine cause of loss, however, that were at issue when the trial resumed yesterday.

Last week ended with Bossier’s question on the table; i.e., were State Farm’s expert witnesses, Forrest Masters, Ph.D. and Robert H. Weisberg, Ph.D., qualified to give an opinion on the cause of Bossier’s loss? State Farm answered by filing a Bench Memorandum stating the Company’s position: Continue reading “State Farm’s expert[sic] all wet: Bossier v State Farm trial update”

TWIA’S 11.2% allocation to wind damage – 100% hot air

TWIA (Texas Windstorm Insurance Association) appears to be convinced ignorance can be a defense; but, what they’ve done to policyholders slabbed by Hurricane Ike is indefensible. Chip Merlin reported on the 11.2% hoax in a recent post, Slabbers Finally Learn How They All Have Exactly 11.2% Damage:

The Bolivar Peninsula TWIA policyholders have had the most frustrating insurance claim experience of any group in recent memory. While we have been having success with other Hurricane Ike claims, the Slabbers claims resolutions have proven difficult. They have not just back and taken this abuse either as I noted in Texas Windstorm “Slabbers” and Policyholders March on Austin.

One even made a joke about how, according to TWIA, they each have exactly 11.2% of building value damage, reflected in The Parable of Hurricane Ike Insurance Claims…

…from what we have reviewed regarding the accuracy and low-balling of the TWIA estimates of partial damage, the entire population will have to be revised

As a result of Javier Delagado following up on evidence produced in an administrative trial, Slabbers finally have the answer of how TWIA performed the calculations that everybody has exactly the same damage. The person making the calculation for TWIA was University of Texas Professor William Spelman. The TWIA attorneys introduced his testimony via a previous administrative hearing to avoid expense—so much for the ability to confront and cross examine a witness. The TWIA pleading was very telling:
Continue reading “TWIA’S 11.2% allocation to wind damage – 100% hot air”

Bossier delayed until Monday

As I alluded yesterday we heard the rumor about the delay and Anita Lee made it official. Today she gives us some added color to the cause:

The fifth day of trial in a Hurricane Katrina wind vs. water case was cancelled Friday because Judge L.T. Senter Jr. was sick.

The jury trial in Bossier v. State Farm is expected to resume Monday morning in U.S. District Court.

Reginald “Ed” Bossier contends that wind effectively destroyed his one-story home before the tide from the Back Bay surged through.

The story also contained an interesting tidbit we’ve been all over since it happened in the very late belated payment to the Bossiers for their outbuilding. Again this is manifest bad faith and illustrates State Farm’s deny first and delay payment approach to their claims handling: Continue reading “Bossier delayed until Monday”

Breaking: Bossier Trial on Delay. Meantime lets drop a few names.

We heard the rumors late this morning and now Anita Lee makes it official, Bossier has been delayed until this afternoon.

Anita’s Wednesday mid afternoon update mentioned State Farm having their PR crew at the Russell courthouse. I was surprised to learn Bob Lapinski, formerly of Allstate, is now working for State Farm. Bob’s LinkedIn page needs some TLC.  Along with Bob is David Majors who is the regional PR contact on the insurance bad faith Farm. MIA is Phil Supple who has a good last name for being in the shillin’ biz. Phil may have gotten a bad oyster last time he was down.

I suspect our very good friend Sup knows Bob. By all accounts Bob is quite the chatty jovial type. Perhaps if Sup sees this he’ll stop in and share some insight with us.

So while we wait for more news on Bossier lets take a trip down memory lane to the 2006 CNN documentary The Town that Fought Back.  Vive La Revolution Continue reading “Breaking: Bossier Trial on Delay. Meantime lets drop a few names.”