h/t Jim Brown
h/t Jim Brown
I’ve been under the weather the past few days but this blurb on the taxpayers getting the billion dollar shaft courtesy of Tim Geithner and the CIT bankruptcy did not escape my notice. As a SBA loan recipient I can attest first hand my file literally employed 2 workers for 12 weeks while Uncle Sam took security interest in everything I owned but my left testes (I drew the line there as a guy has to keep some dignity) yet CIT manages to get signature only terms from Timmy Geithner on the billions in TARP funding they received.
It was while I pondered the discomfort from having our collective financial rear end gang raped without benefit of vaseline on this CIT deal that it struck me the reason for Timmy’s incompetence has been well documented once before several years back in the media. Luckily for the Slabbed Nation I was able to dig it up via youtube. Continue reading “CIT, Timmy and the Lords of the Underworld”
Robert Hartwig isn’t the only prostitute (I mean shill) who will say or do anything (and I mean anything) for the right amount of money. Not to be left out and preferring denial over Hartwiggian threats the AIA issued the following press release: (Nowdy isn’t it about time we got some more hits out of Montana on my post about former Bush Groupie Marc Racicot)
The decision issued yesterday in the case of Corban v. USAA by the Mississippi Supreme Court confirms that the water damage exclusion and anti-concurrent causation (ACC) clause – two key issues in Hurricane Katrina litigation — are valid provisions of the insurance contract and will continue to be important to insurers in adjusting wind versus water claims, says the American Insurance Association (AIA).
“First, and most importantly, the Corban decision reaffirms the longstanding flood exclusion provision found in most homeowners’ insurance policies, that expressly excludes coverage for hurricane driven water (or storm surge),” said James Whittle, AIA Assistant General Counsel. “The water damage or flood exclusion has now withstood every post-Katrina court challenge, and remains a part of regulator-approved insurance contracts throughout the country.” .
“Second, the court upheld the use of the ACC clause that was at issue before the court,” said Whittle. “With this ruling the court has provided meaningful guidance to consumers and insurers. Nothing in this decision changes the important role that insurers play in recovery by adjusting claims according to their contracts with policyholders.”
Meantime the National Underwriter has emerged from their months long Corban slumber carrying a III / AIA press release billed as a news story. While I don’t necessarily buy into James’ harsh critique of Anita Lee’s report on Corban it is worth pointing out Anita Continue reading “Da Corban spin continues: AIA prefers denial while the National Underwriter carries III press release calling it news”
Insurance risk specialist Verisk Analytics Inc. raised $1.88 billion Tuesday in the biggest IPO by a U.S. company since March 2008 after pricing its shares at a higher-than-expected $22 each, according to the Insurance Journal.
The sale of the shares, which had been expected to price at between $19 and $21, marked the biggest IPO by a U.S. company since a $19.6 billion offering by credit card operator Visa Inc .
Verisk, which does most of its business through its subsidiary ISO and is owned by a group of insurance companies, collects actuarial and underwriting data related to U.S. property and casualty insurance risks.
Sing it with me, Mr. CLS! Continue reading “Same old song – this time to the tune of $1.88billion”
I often don’t get to post much of what we are sent for a variety of reasons but since this bust made the national news via NPR I thought I’d give an attaboy to the “Crooks in Gucci Suits” unit at the North Carolina AG office for a job well done.
When I began blogging to what would become Slabbed my knowledge of complex finance was exceeded only by my ignorance of how the political process really worked. What I found from my perch here in Soggy Bottom is that talking aka cussin’ and discussin’ dominates the process. And besides all the talking that goes on inside the beltway there is a mirror conversation that happens on the outside, in places like Yahoo Allstate finance message board and in Sheila Brinbaum speeches where alternate realities are peddled out of economic self interest.
Beyond the shilling however the Government Accountability Office has been looking at the NFIP and their findings tell the real story, of a program abused by private for profit insurers with no oversight on part of FEMA. For instance in September 2007 the GAO found:
FEMA’s payments to WYO insurance companies for operating costs ranged from more than a third to almost two-thirds of the total premiums paid by policyholders to the NFIP for fiscal years 2004 through 2006……
The approach FEMA uses to determine operating costs for WYO insurance companies, rooted in policies negotiated and established about 25 years ago, cannot ensure that payments are based on reasonable estimates of actual expenses because actual expenses incurred by the companies for their services to the NFIP are not considered. Although it has authority to do so, FEMA does not collect data on actual WYO flood insurance expenses that could provide a basis for insuring that the WYO payments are based on a reasonable estimate of actual expenses.
Fast forward to December 2007 and another GAO report which found FEMA asleep at the switch and a program structures to create “an inherent conflict of interest”:
Insurance coverage gaps and claims uncertainties can arise when coverage for hurricane damage is divided among multiple insurance policies. Coverage for hurricanes generally requires more than one policy because private homeowners policies generally exclude flood damage. But the extent of coverage under each policy depends on the cause of the damages, as determined through the claims adjustment process and the policy terms that cover a particular type of damage. This process is further complicated when the damaged property is subjected to a combination of high winds and flooding and evidence at the damage scene is limited. Other claims concerns can arise on such properties when the same insurer serves as both NFIP’s write-your-own (WYO) insurer and the property-casualty (wind) insurer. In such cases, the same company is responsible for determining damages and losses to itself and to NFIP, creating an inherent conflict of interest.
And the GAO continued looking at the program most recently with the issuance of this report dated last month. The professionals at GAO continue to find a program operated with little oversight and no internal controls: Continue reading “The GAO does some more cussin’ and discussin’ on the National Flood Insurance Program”
Those of you who have followed the Judge Rakoff posts are keenly aware that Bank of America (“BOA”) is up shit creek. Not only did it lie in a certified proxy statement filed under SEC law, it looks a lot like BOA purposefully understated Merrill Lynch’s financial condition by $20 billion. All of this was done in connection with a request for federal bail out funds, used by BOA to purchase Merrill last year. None of this would probably matter if BOA wasn’t in court before Judge Jed S. Rakoff.
Judge Jed Rakoff, a great American judge, rejected a phony-assed settlement agreement BOA and the corrupt SEC tried to float by him last week, and told them he wanted names and dates of the fraudulent activities. BOA is scrambling to keep the information secret, claiming attorney-client privilege among other things. Bam Bam readers en garde! There is no privilege when an attorney assists someone in committing or planning to commit, fraud. See Rule of Evidence 502. Don’t ever let anyone tell you different.
Well now Jed Rakoff has thumped Congress out of its slumber, and shamed it into action.
A House panel called the Committee on Oversight and Government Reform has told BOA that it cannot use attorney-client privilege in refusing to answer questions about the BOA-Merrill deal. Chairman Edolphus Towns wants BOA to reveal information that could affect Judge Rakoff’s case and the New York AG’s investigations into the BOA scandal. Continue reading “Judge Jed Rakoff Wakes Up Congress”
ACC, the anti-concurrent cause issue, is burning up my head again. With health care insurance all the rage, it don’t hurt to remind ourselves how Big Insurance grew to be cracked-out body slammers. Most people don’t know that way back in 1945 the McCarran-Ferguson Act exempted Big Insurance (“Big-I”) from federal anti-trust law so long as long as the states “regulated” insurance. What a farce. Big-I and ISO hand out cash Tootsee Rolls to puppet commissioners and presto, before you know it, we’ve got regional, full-blown monopolies. Take health coverage: Wellpoint controls 71% of the Maine market; Blue Cross controls 90% of the North Dakota market and 100% of the Alabama market. All that said, keep your fingers crossed, the House Judiciary Committee (Senator Leahy) introduced an amendment to the health bill which would strip Big-I’s anti-trust exemption.
But, let’s revisit the magnolia ACC a minute. In prior posts, I talked about how Nationwide (probably with ISO’s help) quietly slipped the ACC into Mississippi in the ’80’s. By “slipped,” I mean they submitted a new policy form to the Commissioner for approval. Natch, it was instantly accepted. Recall, Mr Commissioner was indicted in ’94 for taking bribes from Big-I, but never went to trial. Undaunted, a mere 5 years later the legislative PEER committee caught him approving rate requests for State Farm, Allstate, Nationwide et al without any actuarial review. Over 380 rate requests, 59% of all, weren’t even looked at by actuaries.
Some of you may recall that Dale’s deputy commissioner was the one who incessantly chatted with sycophantic law clerks overseeing Katrina, and probably caused the so-called “MID mediation plan” to be crammed down the throats of Katrina homeowners. Using Dale to the fullest, State Farm employed this sham mediation procedure to defraud hundreds and perhaps thousands of insureds. Evidence was produced showing State Farm staged the mediations in advance and actively concealed material evidence from homeowners during the “mediation” process. Continue reading “The ACC Bee Is Still In My Bonnet”
As the Houston Chronicle illustrated in their 1st anniversary of Ike coverage, not only do the taxpayers get stuck with the wind claims insurers dump on the NFIP they also get stuck for the bill for the living expenses these all perils contracts should cover but never do. As a between the lines reader stated in an email:
What this article leaves unstated is that these lengthy disputes over causation ultimately cost federal taxpayers billions of dollars unnecessarily. The federal government pays for trailers, housing vouchers, subsidized loans, tax deductions, grants, and other benefits to assist displaced residents who are engaged in legal disputes with their insurers or who have unintentional gaps in their coverage despite buying all that was recommended by their insurance agents. Meanwhile, because of the delay in the housing recovery, the federal government subsidizes local governments, schools, hospitals, and businesses for extended periods of time until the local tax and consumer base can be restored.
Gang does any of this sound familiar? One key difference is without expedited claims Texas homeowners are having to go after both the NFIP and their wind insurer to be made whole on the coverage they were sold that in theory should fully cover their losses but rarely does without having to sue.
Life in a trailer in his driveway is a daily reminder of Hurricane Ike for Michael Amoroso.
After waiting months for a response from the National Flood Insurance Program, he was declined a bigger payment that he had hoped to use to rebuild.
For Amoroso and other homeowners like him, the storm did more than damage their property. The unrepaired houses and pending insurance claims are a daily test of their will.
“For months they didn’t even return my phone calls or e-mails,” said Amoroso, who plans to sue for more funds. “I am so fed up.” Continue reading “And the beat does go on, as in the beat down of the taxpayers and the NFIP by shady insurers”
lawcomix knows what goes on behind closed doors – that’s why he’s on our blogroll.