Important Development on the Multiple Peril Insurance Bill

[A.M. in the Morning Note: This is fabulous news! Wonderful! Magnificent! The following comes directly off of Congressman Gene Taylor's homepage. Good job, Congressman Taylor. A BIG thanks to the Democratic leadership of Congresswoman Maxine Waters (D-CA) and Congressman Barney Frank (D-MA). Thanks also to Congressman Bobby Jindal (R-LA). ]

The text of H.R. 920, Representative Taylor's Multiple Peril Insurance Bill, has been added to H.R. 1682, the Flood Insurance Reform and Modernization Act. The new bill is numbered H.R. 3121, and also called the Flood Insurance Reform and Modernization Act. The Text of H.R. 920 is in Section 7 of the new bill.

Rep. Maxine Waters (D-CA), Chairwoman of the Housing Subcommittee, introduced the package as a new bill with Gene Taylor, Bobby Jindal (R-LA), Al Green (D-TX), and Barney Frank (D-MA), Chairman of the Financial Services Committee, as original co-sponsors.

Representative Taylor is urging the Financial Services Committee to vote on H.R. 3121 before the August recess.

The flood insurance reform provisions from H.R. 1682 are carried over from a bipartisan flood insurance reform bill that passed the House last year by a vote of 416 to 4, so there should be no controversy with any of its provisions. It did not become law last year because the Senate never voted on its version of the bill.

CLICK HERE for a copy of the text of H.R. 3121, it is not available online yet.

Letters of Support for H.R. 920, the Multi Peril Insurance Program Act

Rep. Taylor's letter to Governor Racicot regarding his analysis of H.R. 920, the Multi Peril Insurance Program Act

H.R. 920, the Multi Peril Insurance Program Act, Frequently Asked Questions

H.R. 920, Multi Peril Insurance Program Act letter of support from Senator Trent Lott

H.R. 920, Multi Peril Insurance Program Act Allstate letter of support

H.R. 920, Multi Peril Insurance Program Act Nationwide letter of support

H.R. 920, Multi Peril Insurance Program Act Governor Haley Barbour letter of support

H.R. 920, Multi Peril Insurance Program Act Gulf Coast Business Council letter of support

Gene's Statement on Immigration Reform

Gene’s Recent Committee Hearing Testimony

Legislative Fixes for Lingering Problems of Katrina Recovery
Subcommittee on Economic Development, Public Buildings, and Emergency Management
of the Committee on Transportation and Infrastructure
May 10, 2007

Perspectives on Natural Disaster Insurance
Subcommittee on Housing and Community Opportunity on the Financial Services Committee
March 27, 2007

Insurance Claims Payment Processes on the Gulf Coast
Subcommittee on Oversight and Investigations of the Financial Services Committee
February 28, 2007

Evidence of Insurance Fraud Submitted to the Oversight and Investigations Subcommittee


To see a full list of Representative Taylor's Katrina documents, CLICK 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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