Barbour sides with Taylor's insurance bill

Posted on Sun Herald Wed, Jul. 18, 2007
By ANITA LEE
calee@sunherald.com

Gov. Haley Barbour, who has stayed out of the legal fray over Hurricane Katrina insurance coverage, has weighed in on the Multiple Perils Insurance Act sponsored by U.S. Rep. Gene Taylor.

Barbour sent a letter of support to the House subcommittee that held a hearing Tuesday on the bill.

"Hurricane Katrina demonstrated holes in the private insurance market and the National Flood Insurance Program," Barbour's letter said, "and I support Congress considering legislation which would create a new program in the National Flood Insurance Program to enable the purchase of wind and flood risk in one policy."

Barbour said the Coast's recovery has been hampered because wind coverage is scarce on the private market and costly to buy from the state wind pool.

The American Insurance Association questions the cost, which might be shifted to taxpayers if the flood program is expanded to include wind. Artificially low rates for flood insurance have helped mire the program in debt.

Taylor said NFIP must charge financially sound rates if wind coverage is made available.

Barbour said the state wind pool, insurer of last resort for the six Coast counties, has grown from 16,000 policies before Katrina to 40,000 today, proving wind coverage is difficult to find. The state has pumped money into the wind pool, but premiums have still increased sharply for homeowners and businesses.
Barbour's letter said, "action is needed at the federal level to ensure the long-term stability of our insurance market."

Read Barbour letter of support here.
Original Sun Herald article here.

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Taylor, insurers lock horns over bill

In the end, Taylor's bill is the only viable proposal
Posted on Sun Herald Wed, Jul. 18, 2007





J. SCOTT APPLEWHITE/THE ASSOCIATED PRESS
Rep. Gene Taylor, D-Miss., listens to opening remarks on Capitol Hill in Washington on Tuesday during a hearing of the House Housing and Community Opportunity subcommittee, as they consider the Multiple Peril Insurance Act of 2007.

By BRANDON PARKER
SUN HERALD WASHINGTON BUREAU

WASHINGTON -- One by one, representatives of insurance companies lined up along a crowded testimony table Tuesday to criticize a proposal to create a federal hurricane coverage program before a House subcommittee.

But after three hours of testimony, Rep. Gene Taylor's bill to add coverage for wind damage to the federally funded National Flood Insurance Program stood as the only viable proposal for insurance reform to protect against property losses like those from Hurricane Katrina.

Taylor says that insurers overcharged the NFIP for the property claims submitted by Gulf Coast residents after Katrina. Damage caused by flooding is covered by the NFIP, whereas insurers must cover wind damage under homeowners' policies. Taylor maintains that many companies took advantage of the NFIP, leading to the program's $17.5 billion deficit.

"Greed is the main disconnect in this situation," said Taylor, D-Miss. "It's easy for them to walk around in their Gucci suits and defend their companies, but the reality is down there on the Gulf Coast, where all of the destroyed homes and property of my constituents are. Of course, these companies don't want to change the rules that are currently in their favor.

"People who played by the rules and expected insurance companies to play by the same rules got screwed," said Taylor, whose bill would create financially sound premium levels to make the NFIP self-supporting.

But insurance industry representatives raised red flags about the costs of the proposal.

Ted Majewski, who represented the American Insurance Association, noted a company analysis that concluded Taylor's bill could increase the NFIP deficits by up to $200 billion in one year.

Furthermore, said Robert Hartwig, president of the Insurance Information Institute, the artificially low government coverage rates would encourage development in flood- and wind-prone areas by homeowners, who typically have insufficient catastrophe insurance.

He also pointed out that fewer than 20 percent of South Mississippi homeowners had flood insurance prior to Katrina and questioned whether homeowners would participate in the bill's voluntary federal program for wind and flood damage protection.

"The proposal's actuarially sound rates still do not address the lack of flood coverage penetration," said Hartwig. "It's not what will happen to the private sector, but what will happen to citizens and their taxpayer money."

Despite the concerns voiced by industry representatives Tuesday, Allstate and Nationwide insurance companies have sent letters to Congress calling for an expansion of the federal government's role in catastrophe insurance.

And the chairwoman of the committee, Rep. Maxine Water, D-Calif., chastised the insurance industry representatives for criticizing Taylor's plan without offering a solution to reform the NFIP to add wind damage protection.

Taylor hopes to see the bill approved by the House committee and sent to the full House for a vote before the August recess.

Original Sun Herald article here.

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Democrats Shame, Skewer Insurance Shills

by Ana Maria

Eloquent, down home as well as brutally truthful and direct in a classy manner, Congressman Gene Taylor (D-MS) shamed 6 witnesses who testified at the House of Representatives’ Subcommittee hearing on Housing and Community Opportunity. Each of these witnesses asserted that from the perspective of the insurance industry, the status quo was good enough. One after the other with painful repetition in this four hour subcommittee meeting that I watched online, each of these corporate shills reiterated the same talking points with a single goal in mind: protect the status quo.

I couldn’t have been more proud of Congressman Taylor’s performance if I myself had personally verbally skewered each of those shills. But I sure as hell would love the opportunity, and I guarantee you that I would not necessarily be nearly as nice or classy about the matter. Over and over again, these shills said the same industry-produced talking points.

1. The Federal Government would loose money if it got into the business of covering all natural perils.


2. The private market can take care of consumers.


3. The Federal Flood Insurance Program should be allowed to do its job.

Of course, the whole lot of them operate in a fact-free bubble which attracts those with similar inclination.

For the majority of the country that comprise the rest of us, we live in a factually-based reality in which fairness and protecting families play an important role in our core values. We believe in fiscal sanity and financial security for our families, our businesses and our country. And that is clearly the primary goal that the Multiple Peril Insurance Act of 2007 achieves.

Region-wide, private companies took premiums from families and businesses then deliberately instructed its agents not to pay on the wind policies. That’s called stealing. When the companies deliberately sent erroneous bills to the Federal Flood Insurance Program—bills for which they had engineering reports that specifically stated wind caused the damage, these companies defrauded the U.S. Treasury thus stealing from the American taxpayers through an inflated $23 billion bill.

ABC News was able to obtain a copy from State Farm files of the original FAEC [Forensic Analysis & Engineering Corp.] damage report, which included the image of an attached "Post-it" note that read, "Put in wind file - do not pay bill - do not discuss"

Image at ABC's The Blotter.

In so doing, the private insurance companies have betrayed American families and business owners. These are the values of the Bush White House. However, betrayal and theft are not mainstream American values.

The corporate shills who testified before this Congressional subcommittee had one message: keep the status quo. Basically, these corporate shills testified that insurance companies should be allowed to continue to steal from American families, businesses, and taxpayers. It’s good for their bottom lines, good for their businesses. The testimony that these shills provided merely protected the industry’s $108 billion in profits earned in 2005 and 2006. They had no concern for the very real impact that their corporate thievery had on Americans.

Does any compassionate and sane individual really believe that these obscene profits at the expense of fiscal obligations to those whom the companies promised financial security are not blood-drenched profits? These shills, these men and women who testified are compassionless corporate cronies. Yes, even the FEMA dude recited the same talking points which surely to goodness came from Bush’s buddies in the insurance industry.

Last week, former GOP Chair Marc Racicot, who now heads the American Insurance Association, sent to Congress and the media a fraudulent report with the same messages embedded in its reality-free rambling. Bush appointed Racicot to head the Republican Party in 2001. Racicot chaired the party while remaining an active lobbyist for Enron.

One after the other, in calm and deliberate fashion, Democratic Congressional members skewered those six panelists. Many of these subcommittee members drove home the reality that insurance companies cheated lower and middle income families out of their rightful claims on their homeowner wind policy provisions. These Democratic congressional members talked of families and business owners who had to hire attorneys and engineering firms to fight their insurance companies for claims that should have been paid within months after the hurricane had hit the area.

Today, many of these businesses are not up and running. Many of these families remain living in FEMA trailers or with other family and friends both inside and outside of the region. Is this the American Dream we want everyone to embrace? Cheat and be rewarded? As Taylor said, his constituents played by the rules and got screwed by the insurance companies.

The reality is that insurance companies betrayed their policyholders. The reality is that insurance companies are jacking up their premiums by god awful amounts or abandoning homeowners throughout the country from the Mid-West like Oklahoma or the West, East, and Gulf Coasts.

Look, according to the National Oceanic and Atmospheric Agency, 55% of us live within 50 miles of the nation’s coastline. These towns and cities are where we live, worship, educate our kids, visit with family and friends, and work. Other than the corrupt Mississippi Insurance Commissioner George Dale, who would suggest that over half of the U.S. population ought to move inland?

The enormous impact from Hurricane Katrina should leave Mississippians wondering if they should live "in harm's way."

With insurance companies failing to protect the financial stability of our families and businesses—and insurance commissioners like Dale helping companies to rip us off blindly, we have turned to the federal government to protect us through expanding the government’s federal flood insurance policy to include wind damage. Indeed, some of the subcommittee members suggested that the new legislation should also include earthquakes and fire both of which are continual threats.

Of its own choosing, the market driven insurance industry has failed to protect us.

The era of insanity of profits over people and of financial greed over family financial security is coming to an end. We will beat the drum until we have enough votes in the House and Senate to pass this bill because we must protect America’s fiscal sanity, fiscal stability for our families and businesses.

If Bush vetoes the legislation, then we will again pass this legislation under an expanded Democratic majority after the 2008 election. Then the newly inaugurated Democratic President will sign this legislation, perhaps as part of a legislative package titled something along the lines of Protecting American Families Financial Security.

That is the point of the legislation. Protecting families, protecting businesses.

Additional resources

1. H.R. 920


2. FAQ regarding the Multiple Peril Insurance Act of 2007


3. Rep. Gene Taylor Asks AIA to Retract Report


4. Trent Lott's letter of support

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A Southern Moonlit Sauna Has Me Thinking of Bush and Jesus

With the beauty of Saturday night’s moon beaming brightly upon the water, hundreds of people gathered at the Bay St. Louis Yacht Club to listen to the deliciously divine music of Deacon John, a New Orleans legend playing all the favorites going back some fifty years. I couldn’t believe how hot it was or that sweat was running down my legs! A young friend informed me, “That isn’t sweat. It’s the humidity stuck to your legs.” I guess it’s been a while since I went dancing under the moonlight with humidity in the night air making life almost unbearable were it not for Deacon John’s music.

I immediately thought, “Thank GAWD I wore shorts and a t-shirt.” Looking around, I saw sweat poring of off everyone. Thus the reason for the HUGE four to five foot fans under the tent where the band played and the rest of us danced. Now, if you thought this was some uptight-dressed-to-the-nines-with-diamond-jewels kind of crowd, you’d have been wrong as wrong could be. At best, everyone wore picnic attire, the same thing many of us had worn earlier that day when we went to the annual Crab Festival at Our Lady Academy, the Catholic all girl high school I attended.

I bought myself a shrimp po-boy—a New Orleans specialty—and sat down at a table filled with folks I didn’t know. Like me, they were enjoying the divinely mouth-watering delicacies for which our region is so well-known. Across from me was a couple who had lost a 5,000 square foot home in Katrina. What did their insurance carrier offer for the damages? $19,000. What a jaw dropper!

Being smart business people, they had tried to get flood insurance and were denied it because they didn’t live in a flood zone. This insurance nightmare pushed this couple into joining one of the Scruggs Katrina lawsuits.

After we finished our meal and concluded our discussion, we parted knowing that we’d be seeing each other at THE event of the weekend: dancing to Deacon John that night. Indeed, we ran into each other soon after the gig began to crank up. Music and dancing are a strong part of our cultural history here which can be most easily understood when taking into consideration the fact that many families, like my own, are originally from New Orleans. Our heat and humidity are other similarities to the birthplace of Jazz.

The South’s Natural Sauna
Saturday night, I voluntarily re-experienced the “Southern Sauna,” as my brother Michael called the horrendous humidity with which we grew up. Of course, being out under the moonlight dancing with my friends was pleasurable play time. I was just out having a good time as sweat ran down the back of my t-shirt and the humidity grabbed a hold of my legs then rolled right down. At least, I could go over to a fan and cool off occasionally. Eventually, I would return to my car with air conditioning which I would drive to my mother’s home that was also air conditioned. I could jump into the shower. These are choices that most of us take for granted.

Two years ago when Katrina hit, electricity and safe-water were near non-existent commodities. My older brother Rosie told me that he would put water in jugs and sit them out in the sun to warm up all day. That way he would have relatively warm water for an evening wash up. Because the water source wasn’t safe for weeks after the storm, he’d put bleach in the jugs to kill the germs.

Rosie said he noticed that those who failed to put bleach in their water ended up with sores on their bodies. And the weather was more scorching than it is at this point in the summer. As I think and write about these things, I cannot imagine the turmoil and nightmare that family, friends, and strangers all lived through in those months, particularly with the horrendous weather.

The worst weather comes in August and September, the two months in which hurricanes tend to hit the Gulf Coast region. Hurricane Betsy hit New Orleans on September 9th, 1965. Camille hit the Mississippi Gulf Coast August 17th, 1969, and Katrina hit on August 29th, 2005, devastating my beloved Gulf Coast and breaching the U.S. Army Corp of Engineers’ levees which flooded our New Orleans.

Sister cities: New Orleans and Baghdad?
I have often thought that the destruction, betrayal, and their accompanying mental toll along the Gulf Coast and in New Orleans resembles that experienced in war-torn areas of the world.The other day, I came across an excerpt in a Daily Kos Diary of an Iraqi blogger writing about his experience in New Orleans. I thought his words particularly insightful.

New Orleans Isn't Very Different from Baghdad!
What shocked me the most in this trip was how the city looked like Baghdad. New Orleans looked like Baghdad after the war in 1991; I swear I kid you not. The devastation, empty houses, the people returning to their life in the city, the "rituals" people practice before they completely come back, the bumps in the streets and the smell of destruction (it has a distinctive smell people. Yes it does.)

I arrived to New Orleans Thursday. On the way to the hotel, I saw the same thing I saw on tv two years ago, destroyed buildings. I couldn’t believe my eyes. Two years later and the scene is the same? Where are we? A government that spent hundreds of billions of dollars on wars overseas is not capable of dealing with a crisis on its own soil! A crisis that all what it needed was money!

Priorities, Hearts, and Money
I grew up with a saying that my mother would recite. It went something like this. “Show me where you spend you money, and I’ll show you where your priorities are.” Other times it would end with “I’ll show you where your heart is.”

When it comes to the priorities and heart of George W. Bush, his White House, and his cronies in the corporate insurance industry, evidence abound. Plenty of taxpayers’ money and resources for his big time campaign contributors even if fraud is committed in padding his contributor’s pocketbook. Nothing much for the rest of us, including his Republican supporters in the Katrina ravaged region.

On the floor of the House of Representatives, Gulf Coast Democratic Congressman Gene Taylor showcased these fraudulent-riddled priorities with regard to Katrina recovery. Specifically, Taylor discussed FEMA trailers that were

“delivered by a friend of the president by the name of Riley Bechtel, a major contributor to Bush administration. He got $16,000 to haul a trailer the last 70 miles from Purvis, Miss., down to the Gulf Coast , hook it up to a garden hose, hook it up to a sewer tap, and plug it in. 16,000.” [Watch the video.]

Clearly, Bush’s priorities are heartless.

Families remain in the toxic formaldehyde-FEMA trailers. Grants remain unpaid. Insurance companies refuse to pay appropriately on claims without the force of attorneys, refuse to provide insurance at reasonable rates, and/or refuse to write policies anymore. Bush has turned a deaf ear refusing to respond appropriately to the heartfelt prayers of the families in need of real leadership in Katrina Land.

Bush and Jesus
My return to the annual fair that the Catholic elementary school of my youth had put on this weekend has me thinking. At Mass and Catholic school, I learned about charity and service to others. More than anything, though, I learned about taking one's responsibilities seriously. Truly, God forbid if I didn’t follow through on some responsibility. I have no idea what would have happened had I been a slacker like George W. Bush. All I know is that I was taught to be responsible. Like many of you across the country, I learned this at home, at school, and at my family’s place of worship.

When it comes to the many responsibilities that Bush neglects especially here in Katrina Land, I’d like to ask Mr. “I’m the nation’s Preacher-in-Chief” one question. What responsibilities would Jesus neglect?

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Mr. “I can do my job” isn’t doing his job

Our state’s insurance commissioner, George Dale, has been rather busy of late speaking before audiences spewing forth one or another talking points provided by the insurance industry with which he is in the preverbal political bed. In his latest appalling display of happily carrying water for the insurance industry, Dale told the Clarksdale Noon Lions Club Katrina [was] "the worst natural disaster in U.S. history . . . and put an undue burden on insurance companies.”

What?! This publicly elected official is unapologetically expressing concern over Katrina’s devastating impact . . . not for families, neighborhoods, communities, and cities all across the Gulf Coast of Mississippi, the state in which he is elected to protect consumers from corporate insurance running amok over them? That would be empathizing with the folks with whom we would expect him to empathize. After all, he is the insurance commissioner for the people of Mississippi.

No, sir. Dale has the gall to reserve his empathy for the industry which all through the Katrina ravaged Mississippi Gulf Coast region has been ripping off consumers, families, businesses, right and left, Republican and Democrat, rich, poor and middle class. In his official capacity, Dale expresses concern for the corporations which boasted obscene billion dollar profits in the aftermath of . . . now, how did Dale characterize it? Oh yeah, “the worst natural disaster in U.S. history.”

A friend too shy for direct attribution and to whom I’ll refer to as a gloriously delightful celestial spirit who came to me in the night summarized Dale’s disgusting public betrayal.

”This is unbelievable. George Dale told the Clarksville Lions Club that Katrina ‘put an undue burden on insurance companies.’ If people pay premiums year in and year out, how is it an ‘undue burden’ for insurance companies to keep the faith with policy holders? I guess George thinks that it is an undue burden for a casino to have to pay off when someone pumps their dollars into a slot machine and hits the jackpot.”

Insurance Companies Hit Billion Dollar Jackpot
With a government insurance commissioner gleefully bouncing around the state touting the latest round of talking points the industry supplies him, no wonder the insurance corporations have been able to hit the billion dollar jackpot.

The Insurance Industry Institute reported that the private insurance industry boasted $44.2 billion in after-tax profits in 2005 and $63.7 billion in after-tax profits in 2006. That’s some heavy profit making. These profits were after the companies had paid out $40.6 billion in Katrina claims. Of course, that wasn’t all of the Katrina-related claims. The industry sent the U.S. federal government flood program a $23 billion bill.

So far, claims paid out on Katrina add up to $64 billion— and this amount only accounts for those who’ve been paid on their claims through 2006. By the end of last year, the private insurance companies had paid $41 billion. These same companies essentially handed a $23 billion bill to American taxpayers for damages that these private companies determined for themselves that flood waters had caused. How generous that the private insurance industry only stiffed the U.S. taxpayers for 36% of the bill, so far.

On his official government website, Congressman Gene Taylor, a good Democrat from the Katrina ravaged Gulf Coast of Mississippi, has an incredible collection of “documents that suggest fraud by insurance companies in the handling of Katrina wind and water claims.” These documents appear to officially direct claims adjusters with such doozies of corporate policies like this one from Nationwide “if loss is caused by both flood and wind there is no coverage.”

NO coverage?!

Or this doozie from State Farm that instructed adjusters that “where wind acts concurrently with flooding to cause damage to the insured property, coverage for the loss exists only under flood coverage.”

Dale’s Foot-in-Mouth Disease
Dale’s insults to Katrina’s survivors continued. The Clarksville Press Registry reported

The enormous impact from Hurricane Katrina should leave Mississippians wondering if they should live "in harm's way," State Insurance Commissioner George Dale.

Let’s see now. According to the U.S. National Oceanic and Atmospheric Administration

“Populations and built environments in coastal watersheds are growing rapidly, with 55 percent of the U.S. population already living within 50 miles of the
coast.”“The Coastal Community Development Partnership” National Oceanic and Atmospheric Administration (NOAA)

The Coastal Community Development Partnership brings together NOAA and EPA offices to better support state and local governments as they promote safer and smarter development along the coast.

Is Commissioner Dale suggesting that 55% of the U.S. population move inland? Katrina’s devastation went well over 100 miles inland. How far inland would he recommend that over half of America’s families move? 150 miles inland? 200 miles? How would he recommend accomplishing that? If it isn’t hurricane country, it’s tornado country or blizzard country or earthquake country.

Dale should focus on doing the job to which he was elected rather than pretending to be the grand master of city planning.

Mr. “I-can-do-my-job” shouldn’t have one
In his impromptu speech before the state’s annual Municipal League conference held on the Gulf Coast this week, Dale repeated this mantra many times “I can do my job.” Thanks to John Leek at Cotton Mouth Blog, another Gulf Coast blog, we have video of Dale’s public admission.

Considering the man has been in the pocket of the very industry he has been responsible for regulating in the 32 years Dale’s been elected to this office, I’m glad to hear him admit that he can do his job. The question, of course, is “when is he going to start?”

Verrrrry Interesting
Before the Lions Club, Dale continued his showmanship in demonstrating his expertise in the foot-in-mouth department. "Can we survive another (Katrina) . . . ?" Excuse me?! This from a man who has all but prostituted himself for the insurance industry that has made recovery all but practically impossible for everyone involved?! Thanks to Dale’s buddies in the insurance industry and their shameless flackey with this Mississippi Insurance Commissioner, surviving Katrina has yet to come to a resilient conclusion.

When I read those highly insensitive words, I thought of the ever popular 1970’s comedy show Rowan and Martin’s Laugh In. The show had a character named Wolfgang, the Nazi soldier who would pop up behind bushes to say the infamous line "Verrry interesting...but schtupit!"

Yep. That's schtupit, alright. George Dale needs to voluntarily retire and work directly for the insurance industry he has protected from any real regulation.

Personally, I think the real question is this. "Should the good people of Mississippi even entertain the thought of surviving another year with an Insurance Commissioner who is a mouthpiece for an industry that ripped off the families and businesses of the Katrina-ravaged regions of the Mississippi Gulf Coast and New Orleans?!"

The answer is no.

Dale’s handling of the Katrina disaster alone should have the Democratic voters in South Mississippi sending this guy packing come the August primary.

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Happy Talk: State Farm and Their Statistics

I come from a musical family. Growing up in my home, playing musical instruments, dancing, and singing were the norm. On Saturdays, one of my older brothers would turn on the radio or put a stack of 45s on the stereo. We would dance with mops and brooms to Motown or other terrific music playing in the background while doing our chores.

As my younger brother now says, “Anything worth doing, is worth doing to music!” I wonder if this is his modern day version of the Mary Poppins’ lyrics “a spoonful of sugar helps the medicine go down.” For old time’s sake, here’s a YouTube version of Julie Andrews singing it. Go ahead, press the button. You know you want to! ;)

Mary Poppin's "Spoonful of Sugar"
Indeed, Disney movies as well as Broadway plays were a big while I was growing up, and their positive influence has remained with me. I have found their lyrics to be supremely instructional. Rogers and Hammerstein’s South Pacific featured the song “Happy Talk” which may be seen as a precursor to the introduction of the power of positive thinking. In the Broadway musical, South Pacific’s character Bloody Mary sang the rhythmic song while playing matchmaker with her daughter and a military guy.

Happy talkin’ Talkin’
happy talk
Talk about things you like to do
You got to have a dream
If you don’t have a dream
How you gonna have a dream come true?

. . .

If you don’t talk happy
And you never have a dream,
Then you never have a dream come true.

Clearly this is good advice with regard to anything we desire, and its magic is legendary for those of us who’ve followed it. We can see its fruits all around us. The fruit itself can be quite deliciously sweet.

However, the fruit can also be demonically poisonous. It just depends on the fruit about which one is happily talking. State Farm’s happy talk about its closed Katrina-related cases is a great example.

In response to the racketeering lawsuit that the Scruggs Katrina Group filed against State Farm, the company’s spokesman Jonathan Freed declared, “More than 99% of all Katrina claims have been paid and settled.”

Mississippi’s Insurance Commissioner George Dale repeats the talking points that the insurance industry apparently provides him. "98 percent of all claims have been paid." This is all happy talkin’ non-sense. The company’s happy talk covers up the sad reality for hurricane survivors. Playing the role of the big bad wolf, State Farm and Commissioner Dale, who is in the industry’s pocket, hope to scare away current and potential plaintiffs from participating in lawsuits that are intended to force the companies to live up to their contractual obligations. Dale’s attorney is a big time lobbyist for the insurance industry, and the commissioner sees no conflict of interest with this relationship.

Oh my, what big teeth you have!
Not really. Mississippi Attorney General Jim “Hood accused State Farm of reporting false statistics, saying the insurer asserted it had settled 99 percent of its Katrina claims. The Attorney General said if the insurer considered a residence damaged by water, it didn't consider it a claim at all.”

What?! Isn’t that what all of the lawsuits are about in the first place? The fact that State Farm and its cohorts in the insurance industry have routinely pawned off on the federal government’s flood insurance program all of the hurricane’s costs regardless of the percent of damage caused by wind and that caused by water? A smidgen of water and bam! The insurance industry hits our Federal flood insurance program with an inflated $23 billion bill. Meanwhile, the Insurance Industry Institute reported that the private insurance industry boasted $44.2 billion in after-tax profits in 2005 and $63.7 billion in after-tax profits in 2006. These profits were after the companies had paid out $40.6 billion in Katrina claims, which of course, are not all of the Katrina-related claims that they should have paid. [For more information, read Scamming Policyholders & Taxpayers.]

Mixing Bloody Mary’s Happy Talk Advice with Alice in Wonderland
State Farm isn’t the only one using the talking point to pretend 99% of Hurricane Katrina claims have been settled. It’s good neighbor Allstate uses the same number, too!

“Allstate spokesman Michael Siemienas said, “We are pleased that these customers are now a part of the 99 percent of Allstate customers in Mississippi whose claims are settled.” What does he mean “are now a part of the 99 percent”? Is this an admission that Allstate had created a number and from now on any claims the corporation really does close appropriately are part of the fictitious number? Geeze, Louise!

Is State Farm—and Allstate, for that matter—combining Bloody Mary’s happy talk advice with “The Unbirthday Song” lyrics from Disney’s Alice in Wonderland? Do you remember that one? It’s about using statistics in a way that favors your goal. Go on. Press the button. You know you want to remember the Disney film of our youth.

Alice in Wonderland's "The Unbirthday Song"
Statistics prove, prove that you've one birthday,
one birthday ev'ry year.
But there are three
hundred and sixty four
unbirthdays.
That is why we're gathered here to cheer.

Let’s recap, shall we? We have State Farm, Allstate, and their industry front man, Mississippi Insurance Commissioner George Dale all singing from the same fictitious happy statistical song sheet.

Too bad I’m not a cartoonist. I could sketch out an editorial cartoon of three men on stage surrounding a single microphone. Two are cartoonish State Farm and Allstate figures dressed in suits made from cloth with their respective company logos as the design. The third member of the trio, of course, would be their front man, George Dale.

The tune? “The 99% Blues” sung in three part harmony and dedicated to Katrina’s plaintiffs. This would be a two frame cartoon. The first frame is a close up of the three singing, smiling, and winking at each other as if to say, “Yeah, buddy, we’re singing in perfect harmony . . . just like always!”

The second would capture the filled-to-capacity auditorium whose audience is up on their feet walking out on the trio’s performance. The trio is screaming, “Where is everybody going?!” Turning to each other, audience members are saying, “Who has that number to the Scruggs Katrina Group?” “I’m calling my attorney when I get home. These guys were handing us a line of you-know-what.”

So what do we do about an industry that is the only game in town to insure us? Two things come to mind.

First, Gulf Coast Congressman Gene Taylor (D-MS) introduced a bill to expand the federal flood insurance program to include all natural perils. Since these private corporations don’t want to keep their word to us, we can change the rules of the game and end the industry’s gravy train. This is within our power. It is up to us to do our part in ending this legal thievery. Following the rules established under the leadership of House Speaker Nancy Pelosi (D-CA), Congressman Gene Taylor’s legislation requires that the program be financially self-sufficient. Good. It should be.

Today’s political hell raising activity will help us provide real all perils insurance for Americans.

We can call and email our congressional representatives to request that they co-sponsor H.R.920, which is called the Multiple Peril Insurance Act of 2007. Raising a little political hell together, we can protect everyone’s families from being soaked by insurance companies.

The second thing that comes to mind is this. For our own purpose, we use the power of Bloody Mary’s happy talk advice. It’s good advice upon which the filmmakers of The Secret have expounded. I’m a big fan of both The Secret and the song "Happy Talk". The Secret is a DVD that introduces the concept of the Law of Attraction, the idea that what we think about with emotion we will attract and manifest into our lives. Bloody Mary conceptualizes this idea in her song. Talk happy, be happy.

State Farm and Allstate talk happy statistics in hopes to make their dream of scamming us come true.

We can talk in terms of quick and fair settlements. We can talk about a quick and just outcome of the racketeering lawsuit to punish insurance corporations that have harmed families and friends in the Katrina-ravaged region. We can talk about passing the Multiple Peril Insurance Act so that when a tornado rips through or an earthquake swallows or a hurricane demolishes or a flood drowns our home, we really will know that we are in good hands. We really will know that our insurance coverage will be there, just like a good neighbor.

For those who are unfamiliar with or for those who simply want to go down memory lane, below you will find South Pacific’s “Happy Talk” video on YouTube. Go on. Push the button. We all can stand to memorize this song. That way, when we a naysayer like the apologists for State Farm and Allstate start singing their fictitious statistical song, we just remember that these days, we’re singing to our own tune.

South Pacific's Happy Talk"

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Wind? Water? More like a Bunch of Hot Air!

Ever since the last drop of Katrina rain passed through the Gulf Coast and the water receded after the levees burst in New Orleans, the insurance industry has been hell bent on implementing at full throttle its great American rip off program. In no time flat did those who had likened their company to good neighbors or to the security of being in good hands issue written instructions on how to maximize what seems to have been their goal: blame Katrina’s damage on flooding.

Let me help the insurance industry become crystal clear on this point. This was a H-U-R-R-I-C-A-N-E! We didn’t call this Katrina, the flood. We didn’t call this Katrina, the tornado. We didn’t call this Katrina, the storm surge. Everybody calls it . . . H-U-R-R-I-C-A-N-E Katrina. Capiche? Now let’s get technical.

The National Oceanic and Atmosphere Administration (NOAO) states on its hurricane preparedness website that “[h]urricane hazards come in many forms: storm surge, high winds, tornadoes, and flooding.”

In other words, a hurricane is a natural disaster consisting of both wind and water. How does one slice and dice the impact of one on the other and the amount of damage directly attributable to each?

Gulf Coast Congressman Gene Taylor (D-MS) testified before Congress that insurance companies were choosing not to pay on claims unless the policy holder provided an eye witness. [See Video: Katrina Insurance Claims Hearing: Rep. Taylor Testimony on the homepage of A.M. in the Morning!]

Can you believe this?! Unethical,? Of course. Heartless? Obviously. Ruthless? Evidently. Maniacal and Evil? Absolutely.

Stupid? No. These corporate execs who made the decision to blame Katrina’s damage on water comes out of value system foreign to most of us of any religious or spiritual background. Seems these execs live in a decency-free bubble where their god, the Almighty Dollar, reigns supreme. There will be no conversions. So, forget any lofty notions of that sort.

What we need are two things. First, we must fully understand how they are getting away with this horrendous travesty. Second, we must understand and implement what we can do to prevent its continuation.

Look, they know how to play us and play the politicians. Moreover, they know how to take advantage of the conflicts of interest that are inherent in the U.S. Government’s National Flood Insurance Program (NFIP).

Yesterday’s piece titled Scamming Policyholders & Taxpayers reported that our federal government has been in the flood insurance business since 1968. The private insurance companies pretty much got out of the flood insurance business “because of the catastrophic and unpredictable nature of floods.” In 1983, the federal government turned over to the private insurance industry the selling, servicing, and adjusting of those policies and claims. This may have been a fine arrangement for those natural disasters that dealt with floods only.

However, when it comes to a hurricane which by its very nature simultaneously involves several types of natural calamities such as storm surge, high winds, tornadoes, and flooding, a conflict of interest rises when it is the private insurance companies that are determining whether damage would be covered by them or by the federal taxpayers. In this instance, the conflict of interest is $23 billion.

So far, claims paid out on Katrina add up to $64 billion— and this amount only accounts for those who’ve been paid on their claims through 2006. By the end of last year, the private insurance companies had paid $41 billion. These same companies essentially handed a $23 billion bill to American taxpayers for damages that these private companies determined flood waters had caused. How generous that the private insurance industry only stiffed us for 36% of the bill.

What a racket! But could companies really be that methodically maniacal to stiff its own customers and the American taxpayers to the tune of at least $23 billion?!

On his official government website, Gulf Coast Congressman Gene Taylor (D-MS) has an incredible collection of “documents that suggest fraud by insurance companies in the handling of Katrina wind and water claims.” The doozies below are from Nationwide, State Farm, and Allstate.

9/4/2005: Nationwide instructed its adjusters that “if loss is caused by both flood and wind there is no coverage.”

9/13/2005: State Farm instructed adjusters that “where wind acts concurrently with flooding to cause damage to the insured property, coverage for the loss exists only under flood coverage.”

6/28/2006: On-site damage assessment by engineer Jerome Quintero of Rimkus Consulting Group for Allstate… concluded that there was “insufficient physical evidence to determine the proportion of wind versus storm surge that destroyed the structure.”

11/4/2005: Jerome Quintero’s damage assessment after revision by Rimkus staff who never visited the site. Quintero’s conclusion of “insufficient physical evidence” was changed to “storm surge and waves destroyed the residence.” Quintero’s name was signed to the revised report without his knowledge.

So there we have it. In the three examples, Nationwide, State Farm, and Allstate seem to be essentially instructing its adjusters to blame Hurricane Katrina’s damage on water alone thereby sticking the American taxpayers with an inflated $23 billion bill.

We haven’t even begun to talk about the rebuilding costs that weren’t covered at all or the folks who didn’t have flood insurance because they believed their policy provided adequate coverage. We haven’t touched on the fact that many like my own family are not in an official flood zone and may not have purchased flood insurance.

What is important, though, is to recognize that what the insurance companies are doing to New Orleans and the Mississippi Gulf Coast can happen to over half the population of our country.

“Populations and built environments in coastal watersheds are growing rapidly, with 55 percent of the U.S. population already living within 50 miles of the coast.”

“The Coastal Community Development Partnership”

National Oceanic and Atmospheric Administration (NOAA)

The Coastal Community Development Partnership brings together NOAA and EPA offices to better support state and local governments as they promote safer and smarter development along the coast.



The name of the game is to be informed and to take action.

Yesterday, we discussed the need to eliminate the insurance industry’s exemption from the anti-trust law governing business throughout our country. Right now, the Senate is considering the Insurance Industry Competition Act (S. 618), which will make it illegal for the insurance companies to collude with each other for things like price fixing and claims adjustment. Go here to tell your two U.S. Senators that you support the Insurance Industry Competition Act.

Today, we take action to protect ourselves from the inherent conflict of interest created because the insurance industry gets to determine for our federal government the amount of damage allegedly attributable to flooding at the same time the private insurance industry is determining the damage at the same property that it will attribute to wind.

Congressman Taylor has introduced H.R. 920, which amends the National Flood Insurance Program. In his testimony before Congress, he stated, “in response to the fact that the insurance industry apparently no longer wants to over people for wind damage in coastal America, or will not provide that coverage at a cost that is reasonable, I am asking you to consider legislation that will expand the National Flood Insurance Program to include all natural perils.”

Taylor explains that under the rules of the House of Representatives, the insurance plan would have to be financed in a way that pays for itself. “Thus, any argument that this would be taxpayer-subsidized would be eliminated. Under the new rules of the House, that is not an option.” What Taylor is referring to is that when the Democrats were swept into office last November, Speaker of the House Nancy Pelosi instituted strong fiscal controls on spending. She ended the fiscally irresponsible era under Republican leadership.

Lastly, Taylor stated, “This problem affects thousands of people. Quite frankly, people should be encouraged to get out of coastal areas in a time of a storm, rather than encouraged to stick behind with a camera to record the event.” Amen to that!

Speaking of the Amen Corner, former Congressional Speaker of the House Newt Gingrich (R-GA), that compassionless conservative crony, has already come out against national disaster insurance. What a shock! The only thing those so-called conservatives are interested in is conserving their power.

During the apex of his reign in Congress, Gingrich accepted almost $425,000 in political contributions from the insurance industry coffers. Newt being a mouthpiece for an industry that has so blazingly betrayed the American people and her families isn’t all that shocking these days.
And just as the wind got knocked out Newt’s political sails, we can partner with Congressman Taylor to take the wind out of the insurance industry’s selling to us wind insurance policies on which they fail to appropriately pay out after a natural disaster.

Today, we can call and email our congressional representatives to request that they co-sponsor H.R.920, which is called the Multiple Peril Insurance Act of 2007.

After all, the more this private industry continues to push their wind vs. water rationale, the more it sounds like nothing more than a bunch of hot air.

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When You’re Up to Your Ass in Alligators . . .

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Nine-foot gator caught near homes in Waveland

Geographically and culturally speaking, the Mississippi Gulf Coast shares a great deal with our neighboring South Louisiana region. Of course, the gnats and mosquitoes travel miles without regard to geography. The more exotic habitat such as alligators and the like in bayou country up the road is simply not part of the beach town ambiance.

So when a 9½ foot alligator was found in a ditch of three feet of water near a school bus stop in Waveland, Miss., I thought to myself, “what the $#%&!”


Here’s the deal. After Katrina, the state of Mississippi loaned the Gulf Coast’s cities $79 million for cleaning up the hurricane’s debris. Some of the cities on the eastern coastline have rebounded enough to recover the loan money from its tax revenues. That isn’t the case with Waveland and Bay St. Louis.

Of the $79 million, Waveland received a $4.5 million loan, my hometown of Bay St. Louis received an $8 million loan, and the Bay-Waveland school district received an $11.5 million loan. Those debts—plus interest—are due in October, barely two years after the nation’s worst natural disaster in our history demolished these cities. Remember, these were two of the three tiny beach towns that comprise Katrina’s ground zero.

What impact will the demand for the money have on these tiny coastal beach towns?

Waveland and Bay St. Louis won’t have the money to fix drainage problems. Today, Waveland has four public works employees; however it had 27 employees prior to Katrina. Without money, the drainage problems will persist. The real life consequences endanger everyone, including children. Regarding the alligator near the bus stop, Waveland Mayor Tommy Longo said "You think those parents weren't ticked?"

In Bay St. Louis “street paving projects and drainage work that would solve the city's flooding problems will be put on hold or canceled until the debt can be repaid, Mayor Eddie Favre said,” reported The Clarion-Ledger. The Bay won’t have money to hire police and firefighters or put up street lights either. You know, the basics for residential and business development.

In a debate on the House floor, Gulf Coast Congressman Gene Taylor (D-MS) characterized the fiscal strength of “little towns like Waveland, Bay St. Louis, Pass Christian, that have no tax base because their stores were destroyed in the storm, a county like Hancock County, where 90% of the residents lost everything, or at least substantial damage to their home . . . .” [See the video. Quite an education in Republican tactics, priorities, and values.] Yet somehow the towns are supposed to come up with money for this epic-sized natural disaster cleanup. Part of the “you’re on your own” Republican view of government, I suppose.

Hold on there. Isn’t this one of the reasons we pay federal taxes?“What’s not happening here is indicative of a dysfunctional government, and that affects everyone. That’s why folks throughout the country should be concerned about the recovery process. We are all for a highly efficient, functional government, and what we have is its diametrical opposite.

“We are already paying the taxes for all the services you could hope to have available in emergency disaster situations like Katrina. And we’re not getting it. We have to take this back and hold the government accountable.”

— Michael Rosato, owner, Cinemagic Audio-Video.

The Bush Administration has not ensured that it is reimbursing Mississippi and Louisiana for its recovery costs. Federal Emergency Management Agency (FEMA—that four letter word, again) is withholding the money. The administration insists that the towns and cities of Mississippi and Louisiana paid too much money to remove Katrina’s debris. When Bush vetoed the Iraq Accountability Act, he vetoed money for Katrina relief including waiving the matching requirement that is putting a great deal of unnecessary burden on the towns and cities in the Katrina-ravaged area.

How ironic that the White House that is hell bent on handing no bid multi-billion dollar contracts to the largest Bush-Cheney campaign contributors (i.e. Halliburton) would insist that in the days after Katrina, the areas impacted would have to go through a traditional bidding process complete with re-bidding should the cost be pricey.

The administration is noticeably silent on paying Riley Bechtel, another major campaign contributor, to transport FEMA trailers 70 miles at a gargantuan price of $16,000 per trailer. Yet, Bush’s FEMA is holding these city and county officials to a standard that is unfair given the extraordinary circumstances.

I’m a former management auditor for the state of Tennessee and the city of San Francisco, and we followed the Generally Accepted Government Auditing Standards (GAGAS), also known as the Yellow Book. I fully agree that the traditional bidding process should be followed with very few exceptions. Clearly, the worst natural disaster in our history qualifies for this exception.

Heck, after 20 months of looking for a contractor to renovate our family home, we were ecstatic when we found someone. Yes, it would be very nice to have gotten several bids and negotiate hard like we would under regular circumstances. But these circumstances are soooooo out of the ordinary. We’re grateful to have someone whose work we trust, whom we feel is trustworthy, and who will get to it quickly.

Surely to goodness, with Bush’s FEMA being AWOL in Katrina’s wake, these towns and cities did the best they could.

St. Bernard Parish, La., just outside New Orleans, is among the communities waiting for a check. FEMA paid the parish about $100 million for debris removal but still owes about $70 million, said David Peralta, the parish's chief administrative officer. St. Bernard also is waiting for $30 million in reimbursement for sewer repairs, Peralta said.

Peralta said FEMA has "kind of implied" that it is looking into whether the parish paid reasonable rates. Peralta defended the Katrina contracts, saying officials tried
to solicit competitive bids without delaying the work.

"We didn't have a whole lot of choices in those first few days," he said.

Look, we have a great saying down here. When you’re up to your ass in alligators, it’s hard to remember that the point was to drain the swamp. In this instance, Mississippi and Louisiana are painfully cognizant of all that needs to be done to restore the region to its pre-Katrina vibrancy including taking care of the drainage problems.

While the Bush Administration chooses to be caught up with the dumb ass—another colorful Southern phrase, we can choose to focus our attention on a few things at our fingertips that will help drain the political swamp in Washington, DC, particularly the White House.

You know what that means? It’s political hell-raising time! Molly Ivins would be so proud.

Cal your congressional representative and two U.S. Senators to request that they work with Gulf Coast Congressman Gene Taylor (D-MS) and Louisiana Senator Mary Landrieu (D-LA) to resolve this issue favorably on behalf of Katrina’s survivors.

Go here for phone script to use when calling your U.S. Senators. Go here for a letter to email. Here is a link to find contact information on your U.S. Senators.

Go here for phone script to use when calling your U.S. Congressional Representative. Go here for a letter to email. Here is a link to find contact information on your Congressional Representative.
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