Constant's pations

If it's more than 30 minutes old, it's not news. It's a blog.

Sunday, September 11, 2005

Insurance fights in Louisiana

It's more than "a little" disturbing to hear of the impending legal fights along the Gulf Coast over insurance liability. [ Other links to FT article: Slu, Rodent, Randy, BlueMass. ]

My Comments

Katrina was devastating, but not unexpected. There are rules and guides to do the right thing.

Some waste time, well paid to stonewall.

Time is of the essense. The job of the Louisiana government and insurance companies is to quickly resolve this issue, not let this drag out for years.

Your voters and clients are watching.

You've already bungled wonderfully before the world media.

Do you propose to do the same in both the public courts and in the halls of government? Please do so, so that we might be further convinced of the need to remedy what is unresponsive.

Who are those who like to delay, debate, and discuss? Who are the ones who like to waste clients money, delay, and let things drag on for years?

We've seen it in the wake of 9-11. And we're seeing it once again in the wake of Katrina. They're called lawyers. But they're a special kind of lawyer. They're arrogant American lawyers.

The same American lawyers who create convoluted financial arrangements to hide money, hide profits, avoid accountability, and leave American citizens, pensioners, and retirees with the trash to clean up. Without even the courtesy of handing out a mop.

Leaders step in. They take charge. They solve problems. In this case, they need to confine the scope of the negotiations to something that makes sense.

The lawyers like to call this the court, legal system, and legislature. If only the lawyers would cooperate, negotiate, and solve problems in a timely, efficient way.

But solving problems means the end, no more billing, and the client no longer sending cash into the legal machine.
If you're not there when the most affected need help, why should anyone believe you'll help others with other issues?
Some people say "You shouldn't build a home in those areas."

Maybe the real answer is that we shouldn't do business in America. Ever. It costs too much to get worthless service. When there's a problem, it's costly to litigate. And the counter parties are only reliable when they're not needed.

Who needs that? Not the world. Yet, Americans are a curious lot, pleading to the UN to have them believe, "We're the best." Yet, their actions show their responses are well short of best. Not even mediocre. Abysmal.

I'm troubled by the sounds of "legal fights." That means attention isn't being put on the client: Your customer, the constituent, the ones who pay premiums and votes. Oh, and by the way: The one that doesn't have a house, lost everything, and needs assistance.

If you don't care about them, why should American citizens care about your tax revenues or your income streams? We can go elsewhere. We can establish new relationships. And you may not be on the list of reliable counter parties.

Your job should be to go behind closed doors, and exit with an agreement. Time is of the essence. Your customer, whether they be a voter or an insurance client, is the one that runs the show.

We are watching you closely. We've already seen the system fail with the abysmal response. If you want to convince us beyond a reasonable doubt that the current American model is flawed beyond repair, I encourage you to continue your deliberations.

Then it will be self evident that radical reforms are needed. Rest assured, your legal opponents know full well that there are many entrenched interest that like things just how they are.

However, Katrina shows us that despite these "interests," interest is not enough. We need results. That means a timely agreement.

It is outrageous that it requires the verbal assault of a city mayor to get the President of the United States to move, engage, and take action on what is clearly a federal matter within his purview.

Thus, it is equally outrageous that as your constituents and clients are told once again to "just wait," that the lawyers and "leaders" are going to "haggle" over something.

That is not impressive.

In the wake of 9-11, we've already seen how long a single site takes to litigate. Louisiana has countless 9-11-like holes in the ground. We are not pleased at the prospect of many years of litigation.

That does not inspire confidence in either the insurance industry, or in the way Americans demand the world to "get along" and "settle disputes."

The longer you delay, the less likely I am to expose my cash to the American model.

Choose wisely. Your job is to solve problems, not make things worse. You're going in the wrong direction.

I remember a case from not too long ago, it involved an insurer called State Farm. Right now, I'm not going to bother looking up the case, as the point is that insurance litigation can drag on for years.

Which brings us to the idea of disaster relief and the Federal Response. Some in the White House like to pretend that the "faith based" responses are all we need.

Self evidently, given the floods and expenses associated with launching armadas of Naval relief and helicopters, I'm not clear that private donation are going to work. Sadly, private relief didn't help hospital workers defending their pharmacies leaving them forced to make a decision: Do we abandon those who are dying and let them suffer; or do we offer them enough morphine to make their passing easier.

Disasters are what insurance companies are all about. That is, that's why someone buys insurance.

The reality is that insurance companies look at things a little differently. Their goals is to make money. They make more money if they get lots of premiums, can invest it, and the losses are low.

They do have a reputation for being sticklers on claims, and some like to look at insurance "adjusters" as just that: They adjust your attitude about insurance. No small consolation for those who are required to buy insurance in order to conduct business or engage in commerce.

We've also recently seen some courageous people dare open their hearts and homes about what's been going on in Louisiana, going so far as to share what the Joint Terrorism Task Force is really doing: Abusing citizens, not helping them out, and basically treating them no better than insurgents in Iraq.

But we aren't going to complain about fascists in the JTTF, we've already done that and the pictures form GITMO and Abu Ghraib only seem to invite greater American desire to suppress reality, not solve the problem. Self evidently, this is what permits fascism to thrive.

Which brings us back to Katrina, Louisiana, and insurance payments. To be clear I am outraged that in the wake of a disaster, those who most need help are unable to rely on either the government or their private insurers.

Rather, despite the political and economic contracts to put some sort of trust that a bargain would be kept we've seen that insurance companies and the government will mutually support each other in doing what the public least desires: Inaction, lack of assistance, and excuses to do what is most oppose of what is expected.

I grow tired of hearing of the many "lessons learned" about insurance: That the insurance company is not there when you need it; or if you make a claim, then your insurance rates go up.

When someone suffers, they need help. Especially when they've paid for it. They don't need a second insult: A runaround at the very time that they don't have the support to resolve the issue.

Insurance is there to help. What we're seeing is the opposite. It is now the insult to the injury. The excuses on top of the outragousness.

These people in the Gulf Coast need help. Now, not after you "get around" to giving them "the run around."

Think of your own situation. How would you like your policy enforced. What would you expect. How would you define "reasonable."

I suspect, there are some who are crafting creative definitions. Redefining reality. Simply hoping to avoid financial liabilities.

The time for that is over. This catastrophe was forseeable. If the policy was not well structured, the time to remedy that defect was when the policy was crafted, not after the disaster has done its damage.

Your clients and voters are on your doorsteps. They have done good by you. They have paid their dues, cast their votes, listed to your sales pitches.

We find ourselves where we are. The time for redrawing the line needs to end. Draw teh line where it was intended to be drawn, not where the line might save your finances.

Do the right thing. Do what Americans across the country have done. They've gone out of their way to make the best of a horrible situation. They've risen to the occaision.

In the long run, the world will see who we can really trust. Who stands by their word.

. . .

I would hope that the national leadership and citizenry in the blogosphere take notice of what is going on: When there is a natural disaster, institutions in both government and private industry fail; and they also work, but only when there is great public outrage.

This is backwards. Because at the very time this nation's citizens are being abused and given poor service, we're told to "put up" with whatever happens.

I'll call that what it is: Bullshit.

These are vulnerable people. They are learning the hard way that when they need help, they can only rely on the kindness of strangers, not on the social or economic contracts they have signed.

Sure, insurance companies can be cold hearted. In that spirit, I would hope that all citizens carefully watch which companies are not doing their part.

Let us recall what the UN did with arrogant counter parties in Iraq: There were sanctions. I call on the public to debate methods to impose lawful, economic sanctions on those companies who refuse to abide by their insurance contracts.

When the vulnerable need assistance, that assistance should be there. The response should be timely.

It is outrageous that the blogosphere may have to mobilize its legal community to provide pro bono services to go after insurance companies who are a little slow. The games are old, but the need is imperative.

This nation needs to send a message: That this capital market is credible, and the financial and regulatory system is one that is both responsive in times of need, and there when the system breaks down.

We do greater disservice to the idea of the "grand idea of capital markets" or the "benefits of capital formation under the umbrella of democracy" when that system proves unresponsive, and unwilling to timely respond to what they have agreed to do.

Let's have some meaningful sanctions on these insurance companies. They knew the risks, God knows their statistical tables were well tabbed to consider the worst case. That's what drove up the insurance rates.

Now, it is time to honor your commitment. It is a promise. And it pains me to think that those who are most vulnerable and in need of assistance, are now going to be told to wait. That is unacceptable.

If it requires the catalyst of costly litigation, or allegations that insurance providers were not acting in a manner consistent with their corporate charters, so be it. And if the legal community wishes to create new legal absurdity to avoid financial responsibility, then we should impose those consequences quickly and drive these companies out of business and send them to foreign lands where they might experience the full brunt of disasters they are not insured against.

It is unacceptable that insurance providers are balking. If they want to play that game, then this nation and the world should closely monitor those agents and firms which do balk, and appropriately reallocate their investments to more responsive counter parties. If it requires the catalyst of another round of litigation and allegations of malfeasance by insurance companies so be it. But it is outrageous that we find that the insurance companies are using the "we're state regulated" as a method to deny claims or move slowly. The entire nation is affected by Katrina, we are all involved, and our capital market depends on a timely response and remedy to this disaster.

If the citizens of the world are truly touched by Katrina, then the citizens need to make their views known to the business leaders in all the states: The time for Federal Regulation is nearing. The time to demand Federal oversight and meaningful sanctions is at hand.

Nobody should have to put up with the failed government which allows a disaster's affects to spread. But it is utterly outrageous and equally scandalous for any insurance company to act no better than a government and move as slow as, if not slower than we might reasonably expect.

Insurance companies need to be reminded that the world is watching. If insurance providers "can't make the payments," then you need to review your own insurance policies you have with the reinsurance companies. At a time when citizens in Louisiana cannot rely on you to timely resolve claims, why should anyone support your desire to have equally fast "reinsurance" from the reinsurance companies?

The answer is that you have a double standard. That is unacceptable. We look forward to a spirited season of Autumn litigation.

You have brought this on yourself. May you suffer the full wrath of the entire blogosphere, and a meaningful clampdown and intrusion by your state attorney general for your unacceptable business practices.

The American insurance companies' response is but one more reason why the world should take note: Look at what Americans do, not what they talk about.

We should not be surprised why the world loses confidence in the American model. Other models look more responsive. They have credible systems. They effectively organize, both the public and private sectors.

How will Katrina shine its light on the new information? The voters and clients are now doing more than simply watching. They are making decisions.

Will you be a reliable counter party?