Mississippi resident still recovering from Hurricane Katrina

September 11, 2007

Two years have passed since Hurricane Katrina stormed ashore along the Gulf Coast. The recovery is still a work in process in places like Gulfport, Mississippi.

Katrina claimed fourteen lives in Gulfport. The high winds and storm surge destroyed 3,500 homes in the city. It also caused severe damage to 5,000 more. The clean up alone has cost more than $76 million.

When we last saw Jack Bethea, he was picking through the rubble of his home. He was also waiting for his FEMA trailer to arrive. Today, Bethea is still living in that FEMA trailer. But he is renovating a home his mother once lived in.

He is grateful for the volunteers from other states who have made it possible. "It's been, as you know, two years. Things have been slower than we anticipated and hoped for, but you know you can see the light at the end of the tunnel now," says Bethea. He says his spirits are good. He hopes to move into his house by Thanksgiving.


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FEMA refuses to pay Miss. county almost $12 M for Katrina work

Associated Press - September 11, 2007 6:24 PM ET

NEW ORLEANS (AP) - The federal government is refusing to reimburse Mississippi's most populous coastal county nearly $12 million for removing debris from Hurricane Katrina.

The Federal Emergency Management Agency is citing concerns about the quality and cost of the work in Harrison County -- home to Biloxi and Gulfport.

According to a letter obtained today (Tuesday) by The Associated Press, FEMA concluded that the county paid unreasonably high costs for clearing storm-damaged trees and didn't adequately document the work.

FEMA's refusal to pay for about for the debris removal is the result of an audit questioning the rates that Harrison County paid contractors for the work. FEMA also found discrepancies in bills that contractors submitted for Katrina debris removal.

Harrison County is appealing FEMA's refusal to pay for removing about $9 million worth of debris on public rights of way and nearly $3 million on private property.

Copyright 2007 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.


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Hancock receives advice on aid

USDA official brings money, too



By J.R. WELSH
baybureau@aol.com

HANCOCK COUNTY --
A U.S. Department of Agriculture official offered candid advice this week for local leaders struggling to replace big chunks of the county swept away in Hurricane Katrina: Hire an outside expert to track relief money and coordinate efforts, and don't hesitate to question FEMA.

Thomas Dorr, the USDA undersecretary for rural development, met with supervisors in his second trip since the hurricane.

He listened to the lament of supervisors: Two years after the storm, the county often seems still at ground zero. The jail, the emergency operations center and the Bay St. Louis courthouse are all still closed from heavy storm damage. The county operates from a fleet of trailers in a dusty, sand-and-gravel parking lot, and everything it tries to do seems tangled in red tape.

"The bureaucracy is terrible. All our buildings are gone," Supervisor Steve Seymour told Dorr. "If we had a hurricane bearing down on us right now, we'd be in a terrible situation."

Dorr suggested county officials push harder for innovative solutions that aren't solved by single-source federal aid. Dorr cited Greensburg, Kan., whose 50,000-gallon public water tank was destroyed when the town was wiped out by a tornado.

FEMA would only replace the old 50,000-gallon tank, although local officials needed 75,000 gallons to cover rebuilding and future growth. To make that possible, the USDA paid the difference.

Dorr and his staff also brought evidence of their concern. They presented supervisors with checks totaling nearly $600,000 for rural road improvements and for office equipment. They also gave $100,000 each to the Diamondhead and the Post 58 fire departments.

Dorr also told supervisors many federal decisions stem from regulations, not laws. As such, they can be questioned. "Regulations are made to be changed," he said. And of FEMA officials, "There's no reason not to call some of these folks on the carpet."

He recommended supervisors hire a "disinterested third party" to track down federal funds and coordinate efforts of consultants already on the payroll.

Dorr also said supervisors should seek help from his department and other agencies in rebuilding a permanent county complex, and consider tying in fiber-optic cable placement with new regional water and sewer systems. That will help attract new business, he said.

Supervisors seemed pleased with the advice. "This discussion has been like looking at a bigger picture," Seymour said.





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ANDERSON PUSHES FOR LOWER INSURANCE RATES

OPPONENT REJECTS "NO INSURANCE MONEY PLEDGE,"
POCKETS INDUSTRY MONEY BY THOUSANDS

Jackson, Mississippi - Insurance Commissioner candidate Gary Anderson, held a press conference at the state's capitol building to address Mississippi's insurance crisis. He reaffirmed his pledge to NOT take money from big insurance or their executives and stated his support for a congressional bill (HR 3121) which seeks to provide multi-peril insurance.

The measure goes a step further than previous bills because it requires the national flood insurance program to enable the purchase of optional insurance against loss resulting from any flood, windstorm or other wind event.

Anderson says the bill is a step in the right direction for Mississippi and that he joins the Mississippi Congressional Delegation in supporting the bill. "I will do everything in my power to lower insurance rates for Mississippians. Last week, I sent a letter to the members of the Mississippi Delegation to let them know that I agree we must take action to provide relief for citizens throughout Mississippi, especially along the Gulf Coast, who are affected by slow recovery due to unresolved insurance claims and other insurance payment related matters," said Anderson at the press conference.

Gary Anderson also reaffirmed his pledge to remain independent of big insurance. Anderson said, "Back in June, I promised the people of Mississippi that I would not take a single dime from big insurance. I stand here today to say that I have not taken a dollar and will not because I know I can't protect the insurance ratepayers of Mississippi if I am in the back pocket of big insurance. My independence from the insurance industry is one of the main differences between my opponent and I."

Anderson said he would use his over 25 years of experience working in the public and private sectors to lower the cost of insurance and build a vibrant insurance marketplace. Anderson has served as the state's Chief Fiscal Officer as well as the Director of Community Development.

Gary was born and raised on his family's farm in Byhalia, Mississippi where his mother, a retired schoolteacher and his father, a farmer and retired fireman still call home. Gary and his wife of 25 years, Debra Miller of Vicksburg, live in Jackson.


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Grateful: Home Builder's Assoc. Strong Ally in Insurance Reform

by Ana Maria

My heart danced with great joy and I burst out in smiles all over the place the other night. I had received the email announcing the great news that the National Association of Home Builders has endorsed Congressman Gene Taylor’s multiple peril insurance policy proposal. This is a big victory for home and business owners. The NAHB is an incredible ally in helping to restore the financial security many of us believe we have when we buy home or business owner insurance policies.

Taylor and his wife Margaret lost their home in Katrina, were denied wind-related damages, and had to hire Dickie Scruggs to fight their insurance company. A Democrat who represents South Mississippi, Taylor and his staff have worked tirelessly on insurance reform. The news about the homebuilders is a welcome addition to the team, I’m sure.

How fantastic that a major, important, and mainstream player in our nation’s economy “gets it.” The National Homebuilders Association understands the crippling negative economic impact of requiring home and business owners to purchase insurance-in-name-only. The impact? Financial ruin for the individual homeowner or business owner and for all the connecting businesses as well, connecting businesses like . . . homebuilders, developers, architects, contractors, electricians, plumbers, carpenters, painters, bricklayers, and so on and so forth.

Their announcement is a great shot of energy that even I felt when I read the article. I’ve been here only six months, yet I’m already experiencing some energy shifts, what one person referred to as the 6-month burnout. Well, I’m not burn out. I am frustrated as hell, though.

I like to get things done. Period. Figure out what needs doing, set my mind to doing it, and begin moving heaven-hell-and-earth to get it done. In no time flat, voila! It’s done no matter what impossibilities may have been required to overcome.

Katrina Land is a different kettle of fish, however. Like many others, I want to do more, but the reality of the enormity of the obstacles astounds me. Help and leadership that would have been here, say, eight or nine years ago, is no where to be found. The brazen abandonment by those leaders upon whom we depend in national or natural emergencies remains shocking, the stinging betrayal unrecognizably unfathomable.

Six years ago today, our entire nation experienced the devastation that we now refer to simply as 9-11. The loss of life profound. The impact on those families immeasurable. Nationally, we felt vulnerable in ways we had not ever before felt.

This week’s 60 Minutes aired a piece titled The Dust At Ground Zero. Yes, today, many first responders and others suffer from breathing in air that the Bush Administration declared safe. Another Bush betrayal in the face of a national emergency.

The Katrina-ravaged region remains a national emergency. When Bush brags about the billions appropriated to the Katrina region, he fails to mention how much remains in the pipeline hung up by his own executive branch politics and bureaucratic red tape that he could clear—if only he wanted to. Instead, he comes to the area for his annual photo op, speaks his niceties and another round of empty promises, and goes to his next stop to do the same. His is a betrayal of pretension.

That’s the kind of betrayal that the insurance industry has imposed upon us nationally as American consumers of residential and business policies. When an insurance company sells policies that fail to do what we pay our good money for it to do, then the insurance company commits betrayal through pretension.

While it may ultimately come as no surprise that Bush’s corporate buddies in the insurance industry betrayed us, the emotional and financial reality of this betrayal has upended our lives permanently in much the same devastating way as 9-11 upended the nation.

I know that insurance is one of those boring, mundane, non-sexy aspects of our lives. There’s nothing all that dramatic about it, except when we don’t have it. Don’t have it, for example, because when our good neighbor sold wind damage insurance to us, we didn’t realize that we when we needed it most we would not be in good hands after all.

Our good neighbor in whose good hands we had hoped to be should something befall us, had apparently pretended to sell us the financial security we desired. Our money went to secure the industry’s $108 billion profits in 2005-2006, but not to secure our homes and businesses.

Fortunately, help has begun to arrive. For this, we are grateful. The announcement that the National Association of Home Builders is joining forces with Speaker Nancy Pelosi (D-CA), and Majority Whip Jim Clyburn (D-SC), and Congressman Gene Taylor (D-MS) creates a stronger foundation to achieve real financial security for America’s home and business owners. As we all move forward together to do our part to solve this financial security crisis, those are good hands to be in.

© 2007 Ana Maria Rosato. All rights reserved.

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Editorial: Insurance crunch goes far beyond beachfront lifestyle

Tue, Sep. 11, 2007

-- South Mississippi has become ground zero for a national insurance crisis that too many in leadership roles in Washington don't seem to understand.

It was reported last week that a "Florida-led bid to trim homeowners' insurance premiums by creating a national risk pool met with staunch opposition from the Bush administration and lawmakers from states who said they are opposed to subsidizing 'a lifestyle of beach living.'

You can conclude by this that many of our leaders in Washington don't understand that

52 percent of all Americans live near a shoreline. And those shorelines are significantly driving our nation's economy. What do they want the majority of Americans to do - move inland? Who will run the oil refineries, shipbuilding industries, fisheries and ports? More permanent residents are linked to the water by jobs than by the "beachfront lifestyle." What an insult that this is not understood. What an incredible lack of understanding.

Mississippi's insurance plight has not resonated across the country in a way that has created a sense of urgency to find a solution, despite the fact that Texas, Louisiana, Alabama, Florida and East Coast states are also feeling the crunch. Our insurance challenge has become the 800-pound gorilla burdening the pace of our recovery. What will it take to find a solution? Will another area of our country have to experience a major disaster before enough leaders understand that some form of all-perils insurance must be created? And how do we convince those in the insurance industry to stop fighting the search for a solution and join us at the table?

At least one national group has come forward, thanks, in part, to local homebuilder John Ruble. On Saturday, the multi-peril insurance proposal before Congress gained a powerful endorsement from the 235,000-member National Association of Homebuilders. Given the fact that our insurance solution is all about politics and the fact that too many insurance lobbyists are working overtime to defeat current proposals for multi-perils coverage, this move by the national homebuilders is hugely important.

U.S. Rep. Gene Taylor hailed it as great news. "The homebuilders recognize that the collapse of the private- insurance market in coastal communities is a national crisis," he said. "I am grateful to John Ruble, Bobby Rayburn, and other Mississippi homebuilders for getting this resolution on the national association's agenda."

Gulfport builder Ruble, who sits on both the state and national chapters' executive boards, said that America's housing industry needs a multi-peril option as part of the National Flood Insurance Program to stimulate business.

The plan would expand the government's flood- insurance program to include wind damage. Many private insurance groups won't write policies on the Coast, and too many South Mississippians are not rebuilding as a result. Ruble said that several of the group's member states, including Mississippi, rely on wind-pool insurance, which is a government-supported wind insurance of last resort for those who live in areas where private insurers have stopped writing wind coverage. The wind pool option is too expensive for most homeowners.

Workers in jobs critical to our nation's economy cannot afford thousands of dollars annually for wind-pool insurance, or thousands of dollars annually for long-distance commutes. We salute the Homebuilders Association for recognizing that building homes near these critical coastal jobs is not a luxury, but a necessity.

The Sun Herald published this editorial on September 11, 2007.




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Private firms take big cut of flood insurance revenue

Tuesday, September 11, 2007
By SEAN REILLY
Washington Bureau

WASHINGTON -- When national flood insurance policyholders pay their yearly premiums, they probably assume the money will mainly be used to pay flood claims. They are assuming wrong, according to congressional reviewers with the Government Accountability Office.

In a new report, those reviewers found that close to two-thirds of last fiscal year's $2.4 billion in premium revenue ended up with the insurance companies that effectively run the National Flood Insurance Program on a day-to-day basis by marketing policies and processing claims.

While the money is intended to cover insurers' operating costs, the GAO questioned whether the reimbursement formula is overly generous. The report also raps Federal Emergency Management Agency managers for repeatedly failing to follow through on auditing requirements.

Although the report does not spell out what individual insurers received last year, the flood program includes State Farm, Allstate, Nationwide and other industry heavyweights, according to FEMA's Web site. The American Insurance Association, a Washington, D.C., trade group that represents such property and casualty insurers, is still analyzing the report and had no comment on the findings, a spokesman said.

In 2005-06, only five out of 94 participating companies had financial statement audits performed, the report says. FEMA should enforce compliance, the report says, and also look into what participating companies actually spend on their work on the federally backed flood insurance program.

The findings drew a mixed reaction from Steven Pecinovsky, an official with the Department of Homeland Security, FEMA's parent agency. In a three-page letter attached to the report, Pecinovsky conceded the need for better audit oversight but described the big payout to insurers essentially as a fluke caused by a deluge of claims following Hurricane Katrina and a half-dozen other storms in 2004 and 2005.

It is "misleading" to show payments to insurers as a percentage of premium revenues in large loss years, Pecinovsky said. Nonetheless, FEMA is looking at ways to cap payments to insurers for processing claims in such years, he said.

Created in 1968, the flood program has some 54,000 policies in effect just in Alabama, the bulk of them for properties in Mobile and Baldwin counties, according to the most recent available statistics.

Mainly because of Katrina losses, the program nationally is $17.5 billion in debt to the federal treasury. The GAO report comes as the House of Representatives is expected to take up legislation this year that, among other changes, would raise the limit on annual premium increases from 10 percent to 15 percent.

A spokesman for the bill's sponsor, U.S. Rep. Maxine Waters, D-Calif., did not respond to a phone call and an e-mail seeking comment. U.S. Rep. Barney Frank, the Massachusetts Democrat who chairs the House Financial Services Committee and is a co-sponsor, has not yet read the report, a spokeswoman said.

The government got into the business of flood coverage because the insurance industry didn't want the job. Paradoxically, however, the program relies heavily on private insurers and agents to sell policies and handle claims, a set-up that FEMA says expands coverage and improves service.

In return, participating companies get to keep about one-third of premium income for commissions, operating expenses and incentive bonuses, the GAO report says. They also collect fees for processing and adjusting claims on a scale that pays them more in major loss years.

The system has existed largely unchanged since 1983, according to the report. FEMA "cannot ensure that payments are based on reasonable estimates of actual expenses," the report says, because the agency does not consider or collect actual expense data from participating companies.

(Readers can reach Press-Register Washington Bureau Reporter Sean Reilly at sean.reilly@newhouse.com or (202) 383-7815.)

© 2007 Press-Register. All rights reserved.
This material may not be published, broadcast, rewritten or redistributed.

Original published on September 11, 2007.


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5th Circuit Ruling: SKG Responds

We are disappointed this particular appellate panel misinterpreted and misapplied established Mississippi law by reversing the well-reasoned ruling of Judge Senter, who has been a Mississippi State and Federal Court Judge for over 40 years and is well-versed in the issues of Mississippi insurance law. We are confident the Mississippi Supreme Court would have affirmed Judge Senter’s ruling if it had been given the opportunity. This ruling is particularly disappointing given the fact this panel did not even have jurisdiction to hear Nationwide’s appeal in the first place. We are still studying the opinion but plan to appeal this panel’s ruling.

However, this ruling will have no effect on our remaining cases pending in Mississippi State and Federal Courts because all of the damage in those cases was caused exclusively by wind before any water arrived. We look forward to continuing to advance the cases of thousands of Mississippi families in this and other courts.

Original posted here on Scruggs Katrina Group website.

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Multiple Peril Insurance: Fundamental Home, Land Security

by Ana Maria



Thank heaven that the one policy for both wind and flood is gathering steam! The National Association of Homebuilders just endorsed the multiple peril policy proposal that Congressman Gene Taylor (D-MS) introduced and will soon be voted on by the entire House of Representatives. The Wall Street Journal recently reported on a survey conducted for the Independent Insurance Agents & Brokers of America the results of which were discouraging as far as the financial security that American families seek through their homeowners insurance.

"nearly three million Americans were dropped by their home insurers in the past two years—more than two-thirds of them in 16 Southeastern states.” [Emphasis mine, of course.]

This is a national problem. In Florida, State Farm is planning to drop 50,000 and Allstate 39,000 policyholders, the Miami Herald wrote in its editorial.

I’m glad to read of important voices and news outlets seeing the light and calling for federal action such as the multiple peril policy Taylor proposed. Thankfully, the paper joins a growing chorus of voices singing the same distinctive tune.

The market is dysfunctional.
The Miami Herald editorial continues.

Today, it should be obvious that the problem is bigger than Florida. It is time for the federal government to act accordingly.

Yeah, and it’s also bigger than Mississippi, Alabama, Oklahoma, California, or any of the other states that are struggling with a cornerstone of the financial security for American families and businesses, particularly small businesses.

To bring the multiple peril insurance policy into reality requires that our elected congressional leaders hear from homeowners and would be homeowners as well as from folks in important industries like the homebuilders. Bankers and realtors are two other industries that we need to get on board with actively endorsing and promoting one policy for both wind and flood.

So if you are a banker or realtor, and especially if you are a leader on a regional or national level, push to get your organizations to embrace this important proposal. Encourage members to contact their congressional representatives now. The multiple peril proposal is great for families and for businesses, because it will enhance the financial security upon which each depend. Clearly, this is among the most fundamental of home, land security.

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WSJ: Putting a Price On Catastrophe

By Ian McDonald

Executives who make their living wagering on risks are gathering in the European casino town of Monte Carlo on Sunday. At a big annual reinsurance conference there, they'll help shape the cost of insurance next year for companies and individuals around the world.

Reinsurers sell insurance coverage to insurers. Many of the bills from many of the world's biggest risks -- hurricanes, plane crashes, terror attacks -- reside on their books. The prices that insurers pay for reinsurance drive, in part, what they charge consumers and companies for coverage.

This year's Rendez-Vous de Septembre conference, held as usual during the ...

THE FULL WSJ.com ARTICLE IS ONLY AVAILABLE TO SUBSCRIBERS.

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