Insurance Crooks at Marsh Convicted of Price Fixin’

Hey pardners why don’t we go help State Farm beat up on Jim Hood. Not!

Two ex-Marsh executives convicted of bid-rigging

NEW YORK (Reuters) – Two former executives at Marsh Inc, a unit of Marsh & McLennan Cos Inc (NYSE:MMC), were found guilty on a monopoly charge on Friday for participating in an insurance bid-rigging scheme, court officials said.

William Gilman, a former executive in Marsh Inc’s Global Broking unit, and Edward J. McNenney, a former global placement director, were acquitted of all other charges they faced in the ruling handed down by New York State Supreme Court Judge James Yates. Continue reading “Insurance Crooks at Marsh Convicted of Price Fixin’”

Insurance News You Can Use

Welp folks this Cowboy don’t know what to make of ole Chaney. One day he campaign promisin‘ to make the insurance commissioner appointed then after he wins he says he wasn’t going to fight for that in the legislature since it was just his personal opinion. A couple weeks back he says rates is goin‘ up and now he says rates is goin‘ down. Maybe one of the others can make sense of this Sun Herald story for me. Continue reading “Insurance News You Can Use”

State Farm Cancels 50,000 Florida Policies

Here you go pardners, the private insurance industry doesn’t want our coastal wind business and they don’t want a federal solution ’cause it might cut into their profits from offshore reinsurance. So what do they do to keep the pressure on? They cancel you out like State Farm just did in Florida and New York. We got this from our friends in Florida at the Herald Tribune:


State Farm dumps 50,000 statewide Continue reading “State Farm Cancels 50,000 Florida Policies”

A Price to Be Paid Boys…..

Welp pardners, this Cowboy just saw something that made me laugh hard. Ole David Dugas is havin’ hisself one heck of a hard time gettin’ that promotion to federal judge ’cause he was soft on crime – insurance crime that is. There is a lesson in this for ole Dunn Lampton too. Look here from our friends over Times Picayune way: Continue reading “A Price to Be Paid Boys…..”

Nationwide: Not on Your Side?

Pardners when this Cowboy says big insurance will go to great lengths to screw the elderly for a buck he means it! Pull up a chair and listen to this poor ole woman’s nightmare dealing with her own insurance company Nationwide Insurance. I hope insurance industry waterboys like Senators Chris Dodd and Richard Shelby are proud of themselves and their service to big insurance. Bless their hearts their mommas must not have taught them right from wrong when they was growin’ up.

Landrieu Legislation to Extract FEMA’s Head Out of Their Ass…..

Bill creates insurance oversight

Plan audits firms in flood program

Tuesday, February 05, 2008
By Rebecca Mowbray

On the heels of a federal report that found “an inherent conflict of interest” in having private insurance companies determine how much the government should pay on flood claims, Sen. Mary Landrieu, D-La., plans to introduce legislation creating an ombudsman to strengthen financial oversight of the National Flood Insurance Program. Continue reading “Landrieu Legislation to Extract FEMA’s Head Out of Their Ass…..”

Bad Faith Insurance Bible: Screw the Common Man

This Cowboy has told ayone who would listen how big insurance companies intentionally screw their customers to save a buck to pay for some obscene executive bonus. Ole Michael Sasso over Tampa Tribune way tells the story of Allstate and what they is hidin’ from them insurance boys in Florida. Pull up a chair and learn more:

Secretive Allstate File Could Show ‘Bad Faith’

By MICHAEL SASSO, The Tampa Tribune

TAMPA – Behind the fight between Florida’s insurance commissioner and Allstate Insurance Co. is a mystery that could have come from a John Grisham novel.

Secret Allstate documents – known as the McKinsey documents – allegedly show how the insurance giant intentionally has made low-ball claims offers to its customers for years, netting Allstate billions of dollars in the process.

But the McKinsey documents have never seen the light of day.

Trial lawyers who have sued Allstate in recent years have eagerly sought them, and Allstate reluctantly has turned them over to lawyers under subpoena. However, each time a judge has prohibited lawyers from distributing them to the media and the public under a protective order.

Florida now is demanding the documents from Allstate and other insurers in a broad-based investigation of the companies’ business practices, including alleged collusion with other insurers and their claims handling procedures. The issue came to a head last week, when Insurance Commissioner Kevin McCarty suspended Allstate’s right to issue new insurance policies in Florida. A judge later lifted McCarty’s suspension.

Allstate spokesman Mike Siemienas said the company intends to turn over the documents, but Florida might not find them all that revealing. The McKinsey documents at issue concern auto insurance – not the hot-button issue of homeowners insurance. Some of the strategies laid out in the documents were just ideas and never became Allstate policy, Siemienas said.

Still, Whitney Buchanan, an Albuquerque, N.M., trial lawyer who has seen the elusive documents, said that if Florida’s insurance commissioner receives them, they could go a long way to showing that Allstate has not been playing fair.

“These documents are devastating to them in bad faith litigation,” Buchanan said.

The McKinsey documents were drafted in the early 1990s, when Allstate hired the consulting firm McKinsey & Co. to review its business practices. Some of McKinsey’s ideas became company practice, said David Berardinelli, a Santa Fe, N.M., trial lawyer who has sued Allstate on occasion.

In the course of one 2001 lawsuit, a judge ordered Allstate to give Berardinelli the McKinsey documents for a short period. The documents bore a watermark that prevented them from being reproduced, but the lawyer took numerous pages of notes on what he saw. He later turned those notes into a book called “From Good Hands to Boxing Gloves,” which is marketed only to lawyers.

File Explains ‘Fast Track’ Strategy

One of Allstate’s strategies: a “fast-track” settlement offer. Berardinelli claims the documents reveal how Allstate would offer insurance claimants an extremely low offer during the first 90 days after an auto accident. During these initial 90 days people are the most in need of money and most likely to accept a low-ball offer, Berardinelli said. Allstate claims adjusters were expected to persuade a certain percentage of customers to accept these fast-track offers, Berardinelli said.

Overall, Allstate tried to standardize the claims process, by using computer models that offered low-ball estimates of the value of a person’s claim, Berardinelli said.

“They are charging people for coverage that they’re never going to get,” said Berardinelli, who has teamed up with Buchanan on occasion to sue Allstate. “That is fraud.”

Siemienas, the Allstate spokesman, said Allstate investigates the merits of each insurance claim and bases its payouts on its investigation. It has no such standardized approach to payouts, he said.

Word of the McKinsey documents’ existence spread among trial lawyers, and soon other lawyers began subpoenaing them from Allstate for their own insurance lawsuits.

Although some lawyers have received them, Allstate has gone to great lengths to prevent their dissemination to the public or the media. Four trial lawyers reached this week all said they are unable to give the documents to anyone else because of a protective order from the court.

Siemienas said Allstate seeks court orders because the documents contain trade secrets that could benefit Allstate’s competitors if they were released.

In an ongoing Missouri case, a judge has ordered Allstate to turn over the documents to an attorney without benefit of the court order. But Allstate has refused, causing the judge to fine the company $25,000 a day until the company turns over the McKinsey papers to the attorney.

Allstate’s fine in the Missouri case has grown to $2.4 million, according to new documents from the Florida Office of Insurance Regulation, which is watching the Missouri case. Rich Halberg, a spokesman for Allstate, acknowledged that there is a court order to produce the documents, but he said the judge hasn’t enforced it and that Allstate hasn’t incurred a fine.

What the documents mean – and how Florida’s insurance commissioner might use them – is debatable.

2nd File Deals With Homeowners Policies

The McKinsey documents that have raised such a fuss nationwide were developed for auto accident cases, Halberg said. They don’t relate to homeowners insurance, which has become such a major issue in Florida in recent years, he said. McKinsey & Co. created other documents for Allstate involving homeowners insurance, Halberg said, but they are not the documents that lawyers have targeted.

A spokesman for McKinsey, Mark Garrett, said in a telephone voice mail that McKinsey does not comment on matters relating to its clients.

Trial lawyers say the documents have become hot property in both auto and property insurance lawsuits.

William “Chip” Merlin, a Tampa trial lawyer, said he has subpoenaed the documents from Allstate on several occasions, and they have helped him secure settlements from the insurer on behalf of clients in auto and homeowners cases. The documents can show juries that a customer’s insurance claim wasn’t handled properly and that Allstate tried to keep unhappy customers from hiring attorneys, Merlin said.

Buchanan, the Albuquerque lawyer, said the documents helped him secure settlements from Allstate, too.

Still, Merlin said the documents alone aren’t enough to win a lawsuit against Allstate.

In Lexington, Ky., trial lawyer Dale Golden subpoenaed Allstate for the documents and filed a class-action lawsuit against the company on behalf of auto accident victims. Even though he had the supposedly damning documents, a judge declined to make the lawsuit a class action, meaning he could not represent a wide group of people. Golden also later lost the case when he brought it on behalf of a single client.

Golden said he is appealing. He said the length to which Allstate has gone to prevent public disclosure shows how damaging they are.

“What else is Allstate hiding?” Golden asked.

Allstate Before the Florida State Senate: Squealin’ Like a Pig!

Welp folks, them crooks at Allstate can run but they can’t hide and they is now before the Florida State Senate tryin’ to explain how they cook the books. From readin’ the story and comments after the story them boys best find a new shade of lipstick to slather on that Pig in the Poke they is tryin’ to sell, ’cause from the sound of it them Florida Senators ain’t buyin’ in to the BS. Hats off to our own Sop who pegged BS weather models as one way them crooks fleece the public. Them posts, includin’ the first one on this here blog are found here and here.

Allstate tells why it didn’t drop rates


As a special Senate committee began two days of hearings with state insurance officials and insurance company executives, Allstate Floridian’s chief executive explained that the company didn’t pass on savings from its reinsurance purchases directly to policyholders because Allstate’s rates already were inadequate.

Joseph Richardson, who was appointed to his current position last March, explained that the 2004 and 2005 storms wiped out the company’s surplus. While capital was replenished by its parent company, the Florida-based insurer sought to rebuild that capital through higher rates.

A massive insurance reform bill passed last January required insurers to pass on savings achieved by buying less-expensive back-up insurance from the state’s catastrophe fund.

The purpose of this special committee’s investigation is to determine why rates haven’t fallen as expected.

The bill expanded the state’s catastrophe fund to provide less expensive backup insurance for insurance. Insurers who bought this reinsurance were required to pass on the savings to policyholders in the form of lower rates. Only 68 percent of the 118 home insurers in the state have lowered rates so far.

Senators spent more than four hours questioning Allstate officials about how the company factored profits into its rates, how it used the computer models to determine how much of a rate increase it needed, and how much and what it paid for reinsurance in recent years.

The panel asked again and again why Allstate bought insurance and asked for a large rate increase last year, even though it has dropped about half of its homeowners policies since 2005.

Allstate requested a 42 percent increase when it provided its final rate filing required by the new law last September. In a preliminary filing in March, Allstate had said it would lower rates an average 14 percent.

The company is also showing a loss of $47 million for the first nine months of 2007, though there were no major storms. Allstate reported net income of $28 million in 2006.

Sen. Jeff Atwater, R-North Palm Beach and co-chairman of this panel, said it was ”just a little perplexing” that the company has perceived greater risk, despite insuring few homes, many of which have withstood many, many hurricanes or are built to the higher standards of states building code.

”Every time you drop someone on the coast, you are reducing risk and profit is increased. You’ve set up for the worst-case scenario,” said Sen. Bill Posey, chairman of the Senate and Banking Committee.

Bonnie Gill, Allstate Floridian’s vice president, explained that Allstate’s rate-making process is based on losses it expects to incur on customers in the next year. It doesn’t include customers that the company will no longer carry on its books.

Indeed, Allstate had about 500,000 homeowners policies in 2004. Now the company has about 200,000 homeowners policies.

Belinda Miller, deputy insurance commissioner, said that was one of the reasons that the Office of Insurance Regulation questioned Allstate’s profit factor in its rate filing because it has dropped so many policies and intends to drop more.

”That should theoretically produce a decline in rate need,” said Miller.

Ron Stouffer, Allstate Floridian’s assistant vice president, said the company spent more for reinsurance in 2007 than in 2006 because the company perceived greater hurricane risk.

The senators were concerned about Allstate’s use of a computer model used for forecasting future hurricane losses that wasn’t approved by Florida. This model uses a shorter-term outlook and could produce a forecast of bigger losses because it incorporates more recent hurricane activity. The state approved model looks at hurricane activity over 100 years or more.

Allstate executives said the company had adjusted its rate filings in 2006 and 2007 with data from the unapproved short-term computer model.

Richardson said the company believes Florida statutes don’t specifically preclude using an unapproved model.

Pee on My Leg and Say It’s Rainin’: Big Insurance Shillin’ for Flood “Reform”

Welp folks, this Cowboy has been tellin’ anyone who’d listen that them insurance companies are a bunch of fancy crooks stealing from the common man many ways. This Cowboy run across one of them scams yesterday. Ole big business Bush and insurance waterboy Chris Dodd want to do us a “favor” and “fix” the flood program. All this Cowboy can say is when these big business lackeys want to fix somethin’ you best hold on to yer wallets boys ’cause the fixin’ is in all right. Against the people!

Lets look at the “favor” ole Dodd wants to give us.

Awash in debt, U.S. flood insurance under scrutiny

Tue Jan 29, 2008 1:47pm EST
By Kevin Drawbaugh

WASHINGTON (Reuters) – Swimming in red ink and scheduled to expire within months if not renewed, the troubled National Flood Insurance Program (NFIP) is about to encounter another round of criticism this week on Capitol Hill.

Congressional investigators are expected to call for closer scrutiny of how insurers handle homeowners’ damage claims from storms in which both wind and water play a destructive role, as they did in the hurricanes of 2005, said sources familiar with the preparation of a report set for release within days.

The Government Accountability Office (GAO) report is expected to focus especially on insurers that sell both wind and flood policies to the same homeowner, a situation the GAO previously has said poses a potential conflict of interest…….

This is where it gets good folks. Remember the insurance industry shills like Robert Hartwig and Chris Dodd say Gene Taylor’s bill will break the budget even though it calls for wind premiums to be actuarially sound. Who is breakin’ the bank folks? Well ole Dodd of course. He dumps the flood deficit (a big chunk caused by wind claims dumpin’) on the taxpayers.

The government is involved in the market because the private sector on its own does not adequately cover flood risk. Most homeowners’ policies cover wind damage, but not flooding. The GAO has previously criticized FEMA’s stewardship of the program and questioned how much money the agency pays private insurers for flood claims. Katrina and the other hurricanes of 2005 left the NFIP $17.3 billion in debt to the U.S. Treasury.

A FEMA spokeswomen declined to comment on the report.

The Senate bill would not expand the NFIP to cover wind damage, as was proposed in a bill approved by the House in September. In another difference with the Senate, the House bill would not forgive the NFIP’s debt.

The Bush administration has threatened to veto the House bill. The insurance industry opposes expansion to cover wind.

Oh boy how does that “warm” rain feel folks? So them Reuters boys think that 17 billion can’t be paid back? Well they haven’t talked to Gene Taylor or looked back in history to see that we did it back in the 1980s.

All we want is a hand, not a hand out and this Cowboy and millions of folks like him stand ready to pay our way. What we ain’t gonna stand for is crooks like big insurance and their waterboy Chris Dodd prentendin’ like they is hepin’ us when they is really stickin’ it to us.