Statement by Dick Scruggs, Attorney

$250,000 contribution to Mississippians for Fair Elections

OXFORD, MISS (July 31, 2007)--Today, I am announcing that I have contributed $250,000 to Mississippians for Fair Elections, an organization that was created to raise awareness about the role the Insurance Commissioner plays in the everyday lives of Mississippians.

The amount I have contributed may seem like a lot of money. But, it is nothing in comparison to the millions that insurance companies are refusing to pay to help Mississippians rebuild their homes and businesses or the millions big insurance pays to influence politicians at the expense of homeowners.

Big insurance has its voice in George Dale. Now, it's time for consumers to have a voice. I am donating this money as an advocate for families who continue to be abused by big insurance. That abuse is not limited to the residents of the Coast. Big insurance has proven it will abuse victims of tornados, ice storms, fires and illness with the same arrogance and contempt they have shown to hurricane victims.

I have contributed to this effort because it's past time for us to have an Insurance Commissioner who works for the people instead of the big insurance bosses. George Dale has been coached by big insurance for years on what he should say. He even turns to their lobbyist for free legal help. When you listen to his comments and statements, it sounds like he is reading a script written by big insurance. He consistently parrots their distorted numbers on claims paid. He never mentions the $68 billion in profits they made in 2006 or the hundreds of millions in bonuses paid last year to big insurance CEOs. Instead, he went so far last month as to imply that Katrina put a burden on the insurance industry.

Every word George Dale says probably comes from some speech writer in the Mid-Western headquarters of big insurance. They tell him what to say and how to regulate. Of course they are coaching him now to say he is running against me. But he is not. George Dale is running against Gary Anderson, Mike Chaney and other candidates who want to work for consumers, not the big insurance companies. By attempting to divert attention from the real issues in the race, George Dale is once again running from his record as the voice of big insurance.

Contact:
For more information, visit scruggskatrinagroup.com on the web
For media inquires, please contact Scruggs Katrina Group at: 662 528 2922
Send emails to: scruggskatrinagroup@gmail.com

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About the Scruggs Katrina Group

The Scruggs Katrina Group is a legal team consisting of Mississippi attorneys from the following firms: Don Barrett, Marshall H. Smith, Jr. and David McMullan, Jr. of the Barrett Law Office; Richard Scruggs, Sid Backstrom and Zach Scruggs of the Scruggs Law Firm; Dewitt Lovelace of the Lovelace Law Firm; and David Nutt, Mary E. ("Meg") McAlister and Derek Wyatt of Nutt & McAlister, PLLC.

See tv spot here.

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For more on Scruggs Katrina Group, you may wish to read the following.

State Farm, Partners, and RICO: What a Racket!

Scruggs Katrina Group File RICO Suit Against State Farm

Additionally, you may wish to read this A.M. in the Morning! series.

Broadening Katrina’s Lens: A five Part Series
Part 1: Broadening Katrina's Lens
Part 2: Recovery’s Two Major Impediments: $$$ and the "F" word
Part 3: The "F" Word: FEMA
Part 4: Katrina’s Bigger Picture
Part 5: Katrina’s Karmic Payback: Insurance Reform

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TAYLOR'S CRUSADE WINS ONE

Flood program expansion approved by House panel

By MARIA RECIO
SUN HERALD WASHINGTON BUREAU
WASHINGTON -- The House Financial Services Committee voted Thursday to make a dramatic change in federal disaster insurance by expanding the national flood insurance program to cover wind damage.

The 38-29 vote, largely along party lines, in favor of the Flood Insurance Reform and Modernization Act of 2007 was spurred by a pledge House Speaker Nancy Pelosi, D-Calif., made after Hurricane Katrina to the coastal communities of Mississippi and Louisiana.

Pelosi will lead a bipartisan delegation to the region in mid-August before the second anniversary of the hurricane, appearing at Bay St. Louis' Our Lady of the Gulf Catholic Church on Aug. 13.

The vote is a personal victory for Rep. Gene Taylor, D-Bay St. Louis, who lost his home in Katrina. Taylor has made it a crusade to explain to members how the current system creates a shortfall with private insurance companies covering wind damage and the federal government covering water, resulting in a bias by insurers who administer the flood program to label all damage "water."

"This really helps people in all coastal areas," said Taylor, noting residents in North Carolina, Florida, Georgia, Alabama, Maine and New York would be able to purchase the expanded coverage, as well as in his home state of Mississippi. "Fifty percent of all Americans live in coastal areas."

Under the committee-approved bill, policyholders of the flood insurance program would be able to purchase wind insurance policies as well. The policies would not be available for those seeking exclusively wind coverage.

The multiple-peril residential policy limit would be set at $500,000 for the structure and $150,000 for contents. The bill increases the maximum coverage for flood insurance policies from $250,000 to $335,000 for residences.

House Financial Services Committee Chairman Barney Frank, D-Mass., said the expanded program would pay for itself through actuarially determined premiums. "What does it cost (taxpayers)? Nothing," said Frank. "It is revenue neutral." He said the bill was necessary because "in the Gulf situation, it was difficult to tell, if not impossible, wind damage."

The legislation encountered stiff resistance from Republicans who said it exposed the federal government to steep liability at a time when the insurance fund was essentially bankrupt. Insurers and consumer groups are opposed to the expansion, warning losses will dramatically increase as claims rise.

"I am not ready to support shifting the burden of wind damage to a plan that is nearly $18 billion in the red," said Rep. Spencer Bacchus, R-Ala., the committee's ranking Republican. The flood insurance program had to borrow $17.5 billion more than it took in because of Katrina-Rita claims.

The legislation makes reforms in the program, increases premiums, phases out subsidized rates paid by vacation-home owners and raises the borrowing authority.

Republican members offered several amendments stripping or delaying the wind provision from the bill, but they were defeated. Rep. Judy Biggert, R-Ill., who opposed the addition of wind coverage until Congress studies the issue further, complained the controversy could sink the legislation.

"This is really adding a poison pill to flood insurance reform bill," said Biggert. Frank acknowledged the bill was controversial but said it would be ready for a floor vote in September.
Taylor predicted the bill would pass on the House floor and hopes in the Senate he can turn to Senate Minority Whip Trent Lott, R-Miss., who also lost his home to Katrina
Democrats, led by Rep. Maxine Waters, D-Calif., chair of the panel's housing and community opportunity subcommittee, recently attached the language from Taylor's bill on "multiple perils" to the flood insurance reauthorization bill.

But Rep. Jeb Hensarling, R-Texas, questioned whether the plan would stay budget-neutral. "I know from experience that these designs don't always work out the way they're supposed to." He said, "I'm still not convinced the private insurance market won't work."

Rep. Mel Watt, D-N.C., countered that the post-Katrina insurance response "was a massive failure of the private sector. There are still people down there who haven't been paid."

Flood Insurance Reform and Modernization Act of 2007 Here are the key features of H.R. 3121:

• Increases the amount FEMA can raise policy rates in any given year from 10 percent to 15 percent.
• Extends multiple-peril policies for wind damage where local governments agree to adopt and enforce building codes and standards designed to minimize wind damage.
• Allows any community participating in the flood insurance program to opt in to the multiple-peril option. The multiple-peril residential-policy limit is $500,000 for the structure and $150,000 for contents. Nonresidential properties could be covered to $1 million for structure and $750,000 for contents and business interruption.
• Increases the maximum coverage limits for flood insurance policies. New coverage limits would be $335,000 for residences, $135,000 for residential contents, and $670,000 for businesses and churches.
• Phases in actuarial rates for vacation homes and nonresidential properties beginning Jan. 1, 2011.

HOUSE FINANCIAL SERVICES COMMITTEE

Original article at Sun Herald published July 27, 2007.



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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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