He and others pointed to the financial collapse of AIG Inc. under federal regulation. AIG insurance companies under state regulation remained solvent.
It was never a question in my mind that AIG, including its state regulated insurance operations, were insolvent. Rather the qustion in my mind was exactly how ignorant the State insurance commissioners that parrotted that III talking point above were and the relative degree of their stupidity. Sadly for our friends in Louisiana I concluded the hands down dumbest insurance commish was Jim Donelon mainly because even Mississippi’s Mike Chaney had enough sense to not parrot Robert Hartwig’s talking points on AIG.
“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.
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.
Meantime this is what Mike Chaney had to say about the BP claims process:
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.
“One thing is certain. The more we all spend on insurance, that’s less money that we spend on other things, like cars, and refrigerators, and clothing. Until the problem is solved, our recovery will never be complete…”
During my travels, I met a widow whose insurance bill has climbed from $2000 a year in 2004 to more than $7000 now. Another homeowner was told his insurance was going up from $2400 a year to $6300. He finally got a policy through an independent broker with Lloyd’s of London for $4000. The list goes on and on.
“This is an out-and-out rejection,” Donelon said. “We’re so far apart, we don’t feel like there’s a reasonable chance for compromise.”
State Farm, which is free to submit a new request, said that it was stunned and disappointed by the rejection…
If the request had been granted, State Farm would have been able to collect an additional $67.6 million from its customers in Louisiana. (emphasis added)
State Farm’s requested increase would have pulled $67,600,000 from Louisiana’s economy. Calculated for the items listed in Walker’s post, there would be 2380 fewer new cars purchased or 56,333 new refrigerators sitting in stores – or, worse yet, the 781,403 school-age Who Dat’s would not be wearing a replica of Drew Brees’ Super Bowl jersey.
Jeff Amy should be proud. His story was picked up by the AP and posted to the Yahoo Allstate summary page. We’ll link his report at the Mobile Press Register directly:
Allstate Corp. and Alfa Mutual group will cumulatively drop wind coverage on 14,000 homeowner policies in Mobile and Baldwin counties over the next 18 months, Alabama Insurance Commissioner Jim Ridling said Tuesday.
The cuts will affect as many as 7 percent of all homeowners in the two counties.
The moves are another jolt to Alabama’s ailing coastal insurance market. Since 2004’s Hurricane Ivan, Allstate, Alfa and State Farm Fire and Casualty have said they would drop wind coverage or all coverage on nearly 41,000 policies, according to Press-Register counts.
Alfa spokesman Jeff Helms said models show his Montgomery-based firm has too much money at risk if a hurricane hits Alabama.
“This is something we needed to do to make sure Alfa could continue to serve its policyholders and pay claims statewide.” Helms said of the decision to cut wind coverage from 5,000 policies.
All this week, Florida’s largest newspaper, the Miami Herald, has been writing both feature articles and editorials about the problems facing Florida property owners in finding affordable insurance. Day after day, headlines conveyed the intensity of the struggle: “Storm Warning: Prop up insurance,” was a typical lead, along with “Is Citizens Insurance ready for the big one?” and “Lawmakers still scrambling on wind insurance.” Florida, like all gulf coast states, has problems of both insurance affordability and availability. But here’s the difference between the Sunshine state and the Bayou state. Florida is giving the problem serious attention. It’s a front and center concern for the governor, the legislature, insurance regulators, and the news media. In Louisiana, there is hardly a whisper.
When Florida Governor Charlie Crist took office a few months before Governor Bobby Jindal in 2007, his first words of commitment were: “The lack of available and affordable property insurance is the biggest threat to our economy. We cannot wait until the regular legislative session to find solutions.” Crisp immediately called a special session of the legislature and offered a litany of changes and reforms that led to cheaper insurance rates.”
Florida has significantly more hurricane exposure than does Louisiana. Ninety percent of all homeowners live within a few miles of the Gulf or the Atlantic Ocean. A hurricane crossing the Florida peninsula slows down, at best, only 15 miles per hour. Yet in spite of all this exposure, property insurance rates are cheaper in Florida than in Louisiana. In Perdido Key, on the Florida-Alabama border, many Louisianans have beach homes or condos. On average, they pay significantly less on these properties than they do on their homes in New Orleans, Baton Rouge and other Louisiana cities. Property insurance rates for commercial real estate have gone down, somewhere in the neighborhood of 30% to 40%, according realtor Steve Ekovich of the Tampa office of Marcus & Millichap, and insurance is more available. Continue reading “Jim Brown Compares Florida”
There is one great thing that you men will all be able to say after this war is over and you are home once again. You may be thankful that twenty years from now when you are sitting by the fireplace with your grandson on your knee and he asks you what you did in the great World War II, you won’t have to cough, shift him to the other knee and say, “Well, your Granddaddy shoveled shit in Louisiana.” No, Sir, you can look him straight in the eye and say, “Son, your Granddaddy rode with the Great Third Army and a Son-of-a-Goddamned-Bitch named Georgie Patton!
Fastforward to the year 2009. Clowns like Jimbo truly are timeless: (H/T Editilla)
All insured real estate owners could be on the hook for a $95 million judgment against Louisiana’s state-backed insurance company, state Insurance Commissioner Jim Donelon said today.
Donelon said he’s considering several options to raise the money to post the bond. One option is to impose a new fee that would be borne by insured homeowners and commercial property owners.
The payment, due Monday, is required because the Louisiana Citizens Property Insurance Corp. lost the first round of a class-action lawsuit in March. The suit, filed in Jefferson Parish on behalf of 18,573 policyholders, argued that the insurer took too long to pay claims after Hurricane Katrina. Citizens is appealing and the case is likely to end up with the state Supreme Court. Continue reading “$peaking of $hoveling $hit…..”
Press reports, both nationally and at home, have confirmed what financial analysists and investigators have known for months. Louisiana continues to have the most dysfunctional insurance system and the worst insurance climate in the country. In almost every category, insurance rates are the highest nationwide. And just last week, the New York Times published a front page investigative report on major financial trouble involving Louisiana’s largest insurance company.
The American Insurance group (A.I.G.) does more insurance related business in Louisiana than any other company. A.I.G. recently received the largest bailout in history. Yet serious questions are being raised about insider swapping of both assets and liabilities among numerous A.I.G. subsidiaries. The Times article says A.I.G. is selling way too much insurance. “State insurance commissioners are supposed to keep insurers from writing new policies if in doubt that they can cover their claims,” the article concludes.
One of the voices raising alarms is former Louisiana chief insurance examiner W.O. Myrick. He was quoted extensively in the Times article, and has looked at a number of A.I.G. subsidiaries that do extensive business in Louisiana. W.O. was of great help in my initial days of taking over a deeply troubled department back in 1991. He assisted me in shutting down some 50 insolvent insurance companies. So he knows the territory, and when he says there is potential trouble, you can bet on it.
Remember now that we are talking not only about Louisiana’s largest company, but one that so far has received over $210 billion in federal bailout funds. That’s a lot of dough in anyone’s book. How much? Figure that $700 for you and each member of your family goes from the tax till to A.I.G. And since the government has to borrow the money, add in 10% for the next 30 years. We ain’t talkin’ chump change here. Continue reading “Jim Brown Joins Slabbed in Calling Out AIG: You’re Insolvent and We Know It”