Archive for the ‘AIG’ Category
Just as Steve predicted back in April, today’s New York Times reports Ex-A.I.G. Chief Is Back, Luring Talent From Rescued Firm:
Even as he has been lambasting the government for its handling of A.I.G. after its near collapse, Mr. Greenberg has been quietly building up a family of insurance companies that could compete with A.I.G. To fill the ranks of his venture, C.V. Starr & Company, he has been hiring some people he once employed.
You have to give Steve and his crystal ball credit:
Greenberg landed at the helm of C.V. Starr (insurance) which he is now reforming into a mini-me AIG. Greenberg will not be satisfied with running a mini-AIG and has recently acquired several key employees from AIG which may ensure the eventual expansion of C.V.Starr (insurance).
Greenberg’s dream of creating as his legacy the world’s greatest financial dynasty did not die with his departure from the helm of AIG. It is his life’s work. Read the rest of this entry »
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. Read the rest of this entry »
A virus called “Anti-concurrent cause”….How it got into Mississippi and effectively flattened a third of Mississippi’s economy
A lot of Mississippians woke up on August 30, 2005, to no house, and thus no net worth. Estimates are 100,940 homes were destroyed or major damaged in the three coastal counties. These families lost nearly everything they owned. Most didn’t even have a copy of their policy, and God forbid, had to trust State Farm to faithfully reproduce it. Homeowners knew little or nothing about FEMA, wind-water protocol, George Dale, Computer Science Corp., David Maurstad, WYO’s or the strychnine phrase “anti-concurrent cause” (“ACC”). Some had policies with “Hurricane Deducible” emblazoned across the top page. (Right away the court declared, nothing misleading about that, it’s okay for insurers to write “hurricane” on the top page of the policy; that doesn’t mean you’re covered for a hurricane). However, in due time all these homeowners would come to realize insurers had sold them a rigged all-risk policy form, approved by a kept man facetiously known as “the insurance commissioner.” Yep, it was some awakening people were in for on August 30, 2005 . . . the nightmare called “Katrina” hadn’t ended, it’d just begun.
The virus that did them in was buried in the labyrinthine FP-7955, a 25 page word salad created exclusively by State Farm’s team of scriveners. The FP (form policy) – 7955 contained 13,859 copyrighted words, not a one of which was ever negotiated or actually consented to. Here was a stupefying irony: the biggest asset most people owned, very often the predicate of their entire net worth, was wrapped up in a junk contract they had no part in making or negotiating, and hadn’t even signed. For all the high and mighty principles contract law stood for, sermonized in treatises like Corban on Contracts, “bargained-for-exchange, reasonable expectations, mutual consideration, good faith and fair dealing,” this most precious of all contracts was nothing but a pile of 13,859 rigged words tethered to a central trap door – the ACC clause.
The fantasy of policy negotiation had been entrusted, “proxied” if you will to Mr Insurance Commissioner. Here again lay a hidden problem. Mr Commissioner was so in the pockets of big insurance he nearly went to prison back in the early 1990′s. Indicted January 12, 1994 on two sets of federal charges involving campaign contributions (bribes) from big insurance, somehow all the charges got mysteriously dismissed without a trial the very next year. I suspect big insurance wasn’t about to sit by and let an investment they’d been building on since 1975 just get pushed off a cliff.
It didn’t take long to see the trap people had stepped into. State Farm began to paper everyone with denial of coverage letters featuring the ACC. If fully invoked, the ACC was a fast action trap door that could drop an insured out of coverage in a nanosecond. Applied full nelson, the insurer could simply declare: “look, read the ACC, anything touched by a molecule of water, at any time, regardless of prior or concurrent wind, is not covered, period.” Of course insurers know pigs get fat, hogs get slaughtered. The better approach was half nelson because the real objective was to buy off legal liability with cheap releases, not break necks and hatch lawsuits. The wise corporate predator knows the policy is a tool to diminish the actual and full value of claims, not renounce all coverage and provoke ugly, one-sided lawsuits.
The ACC virus had been imported into Mississippi in the mid 1980′s, ironically by the same company (Nationwide) whose attorney explained in the Corban v. USAA hearing how the ACC applies. Read the rest of this entry »
Jeff Amy at the Press Register tells the story of Slabbed’s Pro Se Plaintiff, Maralou Richards: “I wanted to find out if the law is really for the people, and it’s really not”
Here at Slabbed, Nowdy and I have split the workload, with me taking press relations and her doing most of our legal profession outreach. From the time of Nowdy’s first post on Maralou Richards last February I figured this unique case would certainly cross over into the traditional media. Time would prove my instincts rights…..just that none of the reporters I emailed with the details would be the one to bring this story to the realm of the mass media. Rather it was journalist that I was previously unfamiliar, Jeff Amy at the Mobile Press Register, that saw the implications and penned a story that well encapsulates the struggles of ordinary policyholders in a legal system that is completely stacked against them. Jeff’s story appears today in both the Mobile Press Register and it’s sister newspaper the Mississippi Press. On behalf of Nowdy and the Slabbed nation we welcome Jeff to the post Katrina party:
It was just another in the rush of federal suits against Mississippi insurers last August, just before the three-year statute of limitations after Hurricane Katrina expired.
Except it wasn’t. Without a lawyer, then-77-year-old Maralou Richards of Ocean Springs filed a handwritten complaint against a unit of AIG, at the time the world’s largest insurance company.
Richards made a confidential settlement in June with Lexington Insurance Co., the court record shows.
But she’s still unhappy. “I wanted to find out if the law is really for the people, and it’s really not,” she said. Read the rest of this entry »
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. Read the rest of this entry »
Jim Brown devotes a radio segment to the dysfunctional Louisiana insurance market and AIG’s insolvency
Yep he did. Keep pounding Jim, AIG policyholders need not also be bagholders too.
Here’s the link to Huff Po where I found this backup to Jim Brown’s column.
You’ll have to go there to read the story and see the big picture of this snapshot.
Thursday, August 13, 2009
Baton Rouge, Louisiana
WHY CAN’T I GET A LOUISIANA BAILOUT?
At first, it was the big financial guys who were “too big to fail” that were getting all that bailout money. Billions to banks, insurance companies, and then to auto makers. If you are old enough to remember back to the depression, the popular song of the suffering epitomized what was taking place:
“Once I built a railroad, I made it run, made it race against time.
Once I built a railroad, now it’s done. Brother, can you spare a dime?”
Well you can sure tell that inflation kicked in. Instead of financial panhandlers asking passersby for a dime, they head to Washington and ask for a spare $50 billion or so.
At the front of the line is A.I.G., Louisiana’s biggest insurance boondoggle that this column wrote about last week. It is hands down the biggest single financial disaster in Louisiana history of a company with such a huge Louisiana presence. This is a company that recently posted the largest quarterly loss in American Corporate history-some $61.7 billion. To put this sum in perspective, A.I.G. was losing more than $27 million every hour. That’s $465,000 every minute.
Now one would assume that there are regulatory mechanisms in place to protect the weary and leery average citizen. And in fact, the supposed white knights are the various state insurance commissioners who took great umbrage of the accusations made in last week’s column of how perilous the financial condition of A.I. G. happens to be. “Misinformation is being circulated” with “inappropriate assertions based on incomplete information that ultimately hurt both policyholders and taxpayers,” the National Association of Insurance Commissioners’ press release lamented. The release went on to say that “A.I.G. companies are financially sound and fully able to pay claims.” Read the rest of this entry »
Nothing is wrong with spreading risks to other companies, a practice known as reinsurance, when it is carried out with unrelated, solvent companies.
It can also be acceptable in small amounts between related companies. But A.I.G.’s companies have reinsured each other to such a large extent, experts say, that now billions of dollars worth of risks may have ended up at related companies that lack the means to cover them.
If my wife is my grandmother,
Then I am her grandchild.
And every time I think of it,
It simply drives me wild.
SLABBED sang a slightly different version of the song in a Sop and Nowdy tag team post last October: As the husband of my grandmother, I am my own grandpa! My name is RenaissanceRe.
Somehow I don’t think the good people in Connecticut are fooled by Chris Dodd’s supposedly new found independence from financial lobbyists (but not their money). We’ve well chronicled Dodd’s financial ties to AIG, offshore reinsurers and Countrywide Homeloans here on slabbed. Dodd is the epitome of the pol on the take IMHO and ordinary people across this country are worse off because of it. Lets visit with Andrew Miga at the Associated Press to see what our boy Dodd has been up to lately:
Facing the toughest re-election fight of his nearly 30 years in the Senate, Sen. Christopher Dodd boasts about snubbing lobbyists.
Yet even as he touts his independence, the embattled Connecticut Democrat is still cashing lobbyist campaign checks and rubbing shoulders with them at fundraisers and party gatherings.
Dodd, perhaps the most vulnerable Senate Democrat in 2010, has driven home his message in fundraising pitches and campaign videos.
“The lobbyists can’t get meetings with Chris,” Dodd’s campaign manager Jay Howser said in a recent e-mail to supporters. “He won’t return their phone calls … Chris just isn’t giving them the time of day.”
The videos even suggest Dodd has been so hard on lobbyists that he’s made them cry.
Indeed these lobbists are crying, from laughing so hard all the way to the bank due to their ownership of the Senator as we continue the story:
But the tough talk hasn’t stopped Dodd from raking in tens of thousands of dollars in lobbyist campaign contributions this year. It hasn’t prevented Dodd from letting lobbyists host his fundraising events. Or kept Dodd from schmoozing with lobbyists at places like Martha’s Vineyard, a favorite summer getaway spot for the rich and famous off the Massachusetts coast.
A few days after Howser’s e-mail, Dodd trekked to Martha’s Vineyard for a Democratic Senatorial Campaign Committee weekend retreat where about 30 senators joined major party donors, including lobbyists. Read the rest of this entry »
We’ve don’t engage much in self puffery here at Slabbed, Nowdy and I always figured the cream would rise to the top on its own when it came to our core topics of insurance in general and the insurance litigation in particular. And while those with responsibility and culpability would love to be able to dismiss us they find it impossible to ignore us. A colleague of mine that works for the NSA has a favorite saying that goes ”Facts are your friend” and indeed they have been very friendly to us. In fact the facts are what sustain us, especially in the face systemic denial and engrained cognitive biases we’ve found prevalent among insurance professionals not on the claims side of the equation. It has not been lost on us the cyber chatter has quieted a good bit since Nationwide’s lawyer beclowned himself before Justice Pierce at the Mississippi Supreme Court with his now famous “5% oral argument” in Corban. But that doesn’t mean this topic isn’t being discussed, it’s just that it is being discussed now on a more national stage.
So Who is Telling the Story?
Amy Bach at United Policyholders is telling the slab story as we’re linked in their Katrina library. United Policyholders is a national organization of consumers that was founded in the aftermath of extraordinary insurer bad faith claims handling after the two major 1990s California earthquakes and various wildfires. A self help group, Amy does great work but unfortunately ran into a road block trying to help coastie Kevin Buckel obtains claims data from our industry friendly Insurance Commish.
Who is Telling the Story?
Policyholder attorney Chip Merlin is telling our story most recently today on his blog as he helps make certain Magistrate Judges cyber famous or infamous as the case may be:
Discovery in Mississippi Katrina litigation has proven difficult. There is little downside for an insurer to refuse to turn over Read the rest of this entry »