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Mark Fiore is a San Francisco cartoonist and animator whose work also appears in the Washington Post, L.A. Times and other publications. | |||
by Sean Reilly
Mobile Press Register Washington Bureau
Original article published on July 27, 2007.
WASHINGTON -- The House Financial Services Committee agreed Thursday to add optional wind coverage to the National Flood Insurance Program, brushing aside objections that such a major step needed more study.
The bill by U.S. Rep. Maxine Waters, D-Calif., would also increase overall coverage limits, phase out subsidized flood insurance rates for businesses and vacation homes, and authorize spending up to $400 million annually for the next five years to pay for flood map updates.
The subsidized rates generally apply to structures built before the early 1970s. For vacation homes in that category, the bill would allow flood insurance administrators to raise rates by 25 percent annually until the full risk-based premium is reached. For subsidized business structures, rate increases of 20 percent annually would be permitted.
In voting 38-29 to send the bill to the full House, the committee broke largely along party lines, with Democrats solidly in support and most Republicans opposed. In arguing for the addition of wind coverage, Chairman Barney Frank, D-Mass., pointed to the wave of "wind" vs. "water" disputes that followed Hurricane Katrina in 2005.
For full discussion of the famed "wind vs water" argument, see Wind? Water? More Like a Bunch of Hot Air!
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A House panel OK'd expanding an insurance program to cover wind damage -- which could bring comfort to Florida residents -- but the plan has Republican critics.
BY MARIA RECIO
mrecio@mcclatchydc.com
(Miami Herald version)
Original published on July 27, 2007.
WASHINGTON --A bill beginning to move through the U.S. House could dramatically change the way windstorm insurance is sold in Florida and other hurricane-prone coastal states.
The House Financial Services Committee voted 38-29 on Thursday to expand the national flood insurance program to cover wind damage. Other proposals floating around Washington would create national catastrophe funds to cover many perils, but this one is focused squarely on hurricane risk.
To be sure, the bill faces stiff opposition ahead -- particularly from Republicans. It could get a floor vote when the House returns from recess in September and, if it passes, would have to prevail in the Senate and get past the White House.
Committee member U.S. Rep. Ron Klein, D-Boca Raton, said he supports the legislation and thinks it would help ease the state's windstorm woes but would not completely solve the insurance crisis.
''This could provide some relief for some people, but I still think we need to take additional steps to reduce insurance costs,'' Klein said.
Read the Miami Herald article.
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by Ana Maria
With a force seemingly more powerful than that of Katrina herself, the House of Representatives Financial Services Committee passed the Flood Insurance Reform and Modernization Act of 2007 keeping in tact the Multiple Peril Insurance Act that had recently been attached to it. In every day language, this means that the Democratically-controlled Congress just took a major step forward in protecting the 55% of Americans who live within 50 miles of the nation’s beautiful coastline. Score one for American families and businesses!
This began nearly two years ago with the insurance companies apparently devising a scheme though which to rip off Mr. and Ms. Home or Business Owners who had just been through the nightmarish Hurricane Katrina with her 22 tornadoes and winds at landfall that were at least 135 miles per hour. Katrina's winds beat down residences and businesses for up to three to four hours. Insurance companies like State Farm, Nationwide, and Allstate directed their agents that if so much as a smidgen of water were on the property to blame all the sustained damage on water.
Those directives and the subsequent documentation on how they were carried out are the foundation for the racketeering (RICO) lawsuit that the Scruggs Katrina Group filed against State Farm and its two corporate partners. [See State Farm, Partners, and RICO: What a Racket! It's another piece I did. You'll love it.]
Image at ABC's The Blotter.
The agents for the federal government’s flood insurance program were the very same agents for State Farm, Nationwide, and Allstate and the like. Insurance companies handed down their directives: Do the paper work shuffle, leave your conscience at the door that Katrina blew away, and deliver the bad news to Mr. and Ms Home or Business Owners.
Routinely, the news went something like this.Mr. and Ms. Homeowner, your wind policy on your homeowner’s insurance won’t pay for any damage. We want to keep to ourselves the $108 billion in profits our industry will make in 2005 and 2006. We have faith that you’ll be ok in spite of our reckless, selfish, irresponsible behavior. We’re greedy bastards who show up religiously at church. We’ll be praying for ya! Do I hear an amen! God bless.
Well, we have been blessed. We have Gulf Coast Representative Gene Taylor (D-MS), a heroic congressman who lost everything in Katrina, whose insurance company screwed over him and his family with failing to pay a penny before resorting to a lawsuit, whose own constituents were experiencing the same level of anguish that he and his family were experiencing.
We are blessed because Congressman Gene Taylor pulled out from the depths of his soul an indefatigable strength to carry on personally and professionally to champion this cause to ensure that America’s families and businesses all over the country never again are exposed to the ravages of corporate greed that has become so apparent in our nation’s insurance industry. To that I say Amen!
President Bill Clinton said something along these lines, “There isn’t anything wrong with America that can’t be made better by what’s right with America.” What is happening with this insurance reform bill is a fantastic example of Clinton’s wise words.
We are blessed because down here in Katrina Land, we reflect the rich tapestry that makes our nation envied the world over. We are of African, European, and Asian descent. We come from Central and South America. Our music is lively and soulful. Our food is hot, strong, and spicy. Our determination to persevere is strong.
To achieve the justice that every home and business owner in America requires in the aftermath of a natural disaster will require that all of us remain determined to persevere through the laborious and slow legislative process that is our form our government.
We can achieve this. The first step is to believe we deserve it. We do deserve it, and now we must embrace that very idea. The second is to believe that it is possible. We have proof that it is. The vote in subcommittee last week—along party lines, I might add, and the vote yesterday—again along party lines with a few conscientious Republicans joining the leadership of every Democrat on the committee. We have achieved step two.
The next step is to take concerted steps in the direction of this legislative dream. You know what that means! It’s political hell raising time. Woohoo! The very next vote will be in the entire chamber of the House of Representatives. It could be as soon as next week before the congress breaks for its August recess. We can say that to achieve our political dreams, we must engage in a bit of political hell raising. What fun!
In the aftermath of Katrina, with the malice of forethought the insurance industry engaged in deceptive practices intent to steal from American home and business owners the benefits that they had paid to have. Through our own political hell raising, we can end the deceptive financial charade of the insurance industry.
We must contact our own congressional representatives and let him or her know that we support the Flood Insurance Reform and Modernization Act of 2007 ESPECIALLY because it includes the Multiple Peril Insurance Act which protects America’s families and businesses.
Sharing our perspective on this critical matter is how we protect our families through expanding the flood insurance program to include wind coverage. Sharing our perspective is how we put a gust of powerful wind under our political sails—and sail into the next round of legislative victories for ourselves, our families, and our businesses.
[Here are political hell raising email and phone activities.]
If you enjoyed this, you may also wish to read . . .
Bookies, Pimps, and Insurance Companies.
Commercial insurance rates will crush small businesses
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Flood Insurance Reform and Modernization Act of 2007 Here are the key features of H.R. 3121: 
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."
HOUSE FINANCIAL SERVICES COMMITTEE
Original article at Sun Herald published July 27, 2007.
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Letter to the Editor
Your article of July 18 hit the nail squarely on the head.
For my small enterprise, a 300 percent increase in rates just passed across my desk. And it gets better. Due to the age of my office structure, I was forced into the wind pool, despite my loyal payments and minimal Katrina damage. No more fence insurance available either, unless I resort to the pool at much higher rates. The sad part is that I can't afford enough coverage for total replacement.
This stings. It will hurt my business, my employees, and - when compounded by the fact that every other small business is facing the same hurdle - it will hurt South Mississippi.
In the words of Congressman Gene Taylor: "People who played by the rules and expected insurance companies to play by the same rules got screwed."
JIMMY MILLER
Gulfport
Published in Sun Herald on July 26, 2007.
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District judge determined to prosecute for contempt
THE ASSOCIATED PRESS
Posted on Thu, Jul. 26, 2007
BIRMINGHAM, Ala. --The U.S. attorney in Birmingham on Wednesday declined a federal judge's request to prosecute prominent Mississippi attorney Richard F. "Dickie" Scruggs and his law firm for criminal contempt in a Hurricane Katrina insurance dispute.
U.S. Attorney Alice Martin said in the letter to U.S. District Judge William M. Acker Jr. "following a serious and thorough review of the facts surrounding this indirect criminal contempt, I respectfully decline to prosecute Mr. Scruggs or his firm."
In his June 15 request, Acker said he would appoint another attorney to handle the prosecution if Martin declined the court's request.
Acker's office did not immediately return a phone call seeking comment Wednesday afternoon.
A spokeswoman for Martin's office, Jill Ellis, said the U.S. attorney had no further comment beyond the letter.
Scruggs, a highly successful plaintiffs' lawyer, is suing State Farm on behalf of hundreds of Mississippi residents.
Scruggs could not be reached for comment Wednesday afternoon, but Zach Scruggs, his son and law partner in Oxford, said he received a copy of Martin's letter.
"We believe that the U.S. attorney's letter says all that needs to be said about this matter, and it would be inappropriate for us to say anything else at this time," Zach Scruggs told The Associated Press.
Acker ruled in June that Scruggs "willfully violated" a Dec. 8 preliminary injunction that required him to deliver "all documents" about State Farm Property and Casualty Insurance Co. secretly copied after Katrina by whistle-blowers Cori and Kerri Rigsby.
Acker's ruling came in a suit by E.A. Renfroe and Co. Inc., a claims-adjusting firm that fired the Rigsbys after finding out they had taken internal documents.
Renfroe and Co. worked for State Farm, and the sisters were heavily involved in processing claims for the insurance giant.
Instead of complying with the December injunction, Acker said in the June ruling, Scruggs promptly sent the documents to Mississippi Attorney General Jim Hood's office "for the calculated purpose of ensuring noncompliance with or avoidance" of the injunction.
He said Scruggs' motive seemed clear from the undisputed facts.
"Even after Hood 'voluntarily' sent the documents to counsel for Renfroe at Scruggs's request, Scruggs wrote to Hood requesting another copy of the same documents for himself and ostensibly for the Scruggs Katrina Group," the judge wrote.
At the time, Scruggs called the judge's actions "bizarre" and said his firm had completely complied with the injunction.
The Rigsbys, from Ocean Springs, have admitted copying thousands of pages of records to back up their allegations State Farm wrongly denied claims after Katrina.
The sisters gave the documents to law enforcement agents and Scruggs, who signed them each to a $150,000-a-year consulting contract. The sisters say they made about 15,000 copies - three sets of 5,000 separate records.
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The Associated Press
July 25, 2007
BIRMINGHAM — The U.S. attorney in Birmingham declined today a federal judge’s request to prosecute prominent Mississippi attorney Richard F. Scruggs and his law firm for criminal contempt in a Hurricane Katrina insurance dispute.
U.S. Attorney Alice Martin said in the letter to U.S. District Judge William M. Acker Jr. that “following a serious and thorough review of the facts surrounding this indirect criminal contempt,” she had decided not to prosecute Scruggs or his law firm.
In his June 15 request Acker said he would appoint another attorney to handle the prosecution if Martin declined the court’s request.
Acker’s office did not immediately return a phone call seeking comment this afternoon.
A spokeswoman for Martin’s office, Jill Ellis, said the U.S. attorney had no further comment beyond the letter.
Acker ruled in June that Scruggs “willfully violated” a Dec. 8 preliminary injunction that required him to deliver “all documents” about State Farm Insurance Co. that whistleblowers Cori and Kerri Rigsby secretly copied after Katrina.
Acker’s ruling came in a suit by E.A. Renfroe and Co. Inc., a claims adjusting firm that fired the Rigsbys after finding out they had taken internal documents.
Renfroe and Co. worked for State Farm, and the sisters were heavily involved in processing claims for the insurance giant.
Original article published here.
by Ana Maria
What else do you call a man who refuses to show his face in a part of Mississippi that knows best his handiwork as a failed insurance commissioner in the aftermath of Katrina? I call him a coward, a chicken. That’s right. Chicken George.
How do I know that Chicken George Dale refuses to show his face around here? That Big Chicken bought over $275,000 worth of campaign radio and television ads for the last two weeks of this election season which ends on August 7th.
As of last week, Dale’s advertising buys to reach Mississippi voters included Jackson ($117,000), Columbus/Tupelo ($63,000), Laurel/Hattiesburg ($43,000), Greenwood/Greenville ($19,000), and Meridian ($31,000), Miss., as well as Memphis, Tenn., ($5,000). He didn’t schedule one radio or television ad to run here on the coast of Mississippi. Not one dime for an advertisement along the Gulf Coast. Not a single, ity bitty penny. Not ONE.
If Chicken George is so damned proud of his performance during the aftermath of the worst natural disaster in our history, wouldn’t you think that he’d be clucking about it all over the place? Clucking at meetings. Clucking on the radio. Clucking on television.
But nooooooooo. Chicken George is deliberately keeping his beak shut and off the airwaves all across the Mississippi Gulf Coast. It being an off-season election, he may be hoping that his detractors here on the Gulf Coast will be too busy trying to figure out how to put their lives back together to notice that casting a ballot for his Democratic opponent could send Dale packing.
I heard a good joke that Dale worried everyone along the coast hated him. Someone kindly informed him, “Not at all, George. Only those with insurance.”
Here on the Mississippi Gulf Coast is where Chicken George Dale helped his buddies in the insurance industry have their way with plenty of families and businesses.
Rather than protecting Mississippi’s consumers—the families and businesses that have to have insurance for their financial security, Chicken George served them up as if chicken on a grill in the middle of summer.
Well, Chicken George, life under your rules and policies has been anything but a picnic.
Yes, you sure do know how to give a good speech . . . long out of ear range for those families and businesses who. you’ve helped be denied the money their insurance companies owed them. You forced the hands of your constituents. They turned to the courts to protect themselves when they should have been able to count on you to protect them. After Katrina, you turned your back on your constituents, and now you have nothing to say for it. You cannot defend yourself, so you remain silent. Your silence is deafening, George Dale. You are a coward. A chicken.
The Chicken Opens His Beak to Speak
When Chicken George opened his beak to speak before the Lion’s Club in Clarksdale, Miss., he said Katrina was “the worst natural disaster in U.S. history . . . and put an undue burden on insurance companies.” Imagine that? What a thing for him to say as the man elected to protect commercial and residential consumers from insurance companies that want to collect premiums but not pay on legitimate claims.
Interestingly, Dale has already been thinking of a career change, into that of grand master of city planning. The Clarksdale Press Register reported Chicken George sayingThe enormous impact from Hurricane Katrina should leave Mississippians wondering if they should live "in harm's way. . . "
Harm’s way? Living near the water is being in harm’s way.
Chicken George apparently can’t read or research. According to the U.S. National Oceanic and Atmospheric Agency, 55% of us in the country live within 50 miles of the nation’s coastline. It’s on the agency’s website, Chicken George. Just click on this hyperlink, and it will take you there.
So, George, if you are suggesting that over half of the U.S. population move inland, to where do you intend for us to move? 150 miles inland? 200 miles? How would you recommend accomplishing that, Chicken George? If it isn’t hurricane country, it’s tornado country or blizzard country or earthquake country. Where is this elusive place you wish for everyone to live?
Of course, I have a better idea, Chicken George.
How’s about we all stay put and have the insurance companies pay what they owe on wind policies and pay back with interest and penalties—and maybe some good old fashioned jail time—the money these companies deliberately bilked from the National Flood Insurance Program.
Chicken George, you should have focused on doing the job to which you were elected rather than pretending to be the grand master of city planning. It really is not a good fit for ya, George. Perhaps you might consider culinary school. I bet you’d make a fine chicken stew.
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