So while senor managment at AIG is spending their time figuring out how to pay themselves more bonuses….

As our good friend Steve observed yesterday:

AIG (common stock) is burning to the ground…….

D-I-S-C-O-N-N-E-C-T

Investors are fleeing for the exits once again.

Additional evidence the insurance crowd in New York marches to the beat of a different drummer

You’d think after the first time AIG paid fat executive bonuses while borrowing billions from the Treasury because of their habit of “tatooing” toxic paper they would have learned. Nope, seems the gang thinks they deserve extra for their fine work cratering the financial system in 2008. So while the nations unemployment rate skyrockets to 10% thanks to Wall Street greed millions in taxpayer dollars will be paid to the people who brought you this disaster.

D-I-S-C-O-N-N-E-C-T

Here is the Reuters story courtesy of Yahoo Finance:

American International Group (NYSE:AIG – News) is preparing to pay next week millions of dollars more in bonuses to dozens of corporate executives, a source familiar with the development said.

AIG has been talking with Washington’s newly-appointed compensation czar Kenneth Feinberg about the bonuses, which are due to be paid on July 15, said the source.

The company is reviewing its compensation plans with Washington as it tries to avoid the national furor set off by $165 million in retention bonuses paid to employees of a financial products unit in March. Much of AIG’s $99 billion in losses last year stemmed from derivatives written by that unit.

SLABBED Daily – July 10 (keeping score #2)

Yesterday was a big day for Nationwide litigation.  Take a look at what settled!

O’Bannon et al v. Nationwide Mutual Fire Insurance Company et al closed 07/09/09

• O’Bannon cites Corban transcript in Motion to Stay case against Nationwide

• Condoms in the courtroom – State Farm wears protection, wants to %#!# you! EDITED

Hartman v. Nationwide Mutual Fire Insurance Company et al  closed 07/09/09

• On the other side – policyholders v Nationwide

Williams et al v. Nationwide Mutual Insurance Company et al  closed 07/09/09

You’d think if they settled O’Bannon…oh, well, maybe Nationwide just wants to let the jury write Mrs. Politz check.

Yesterday was a busy day, but not a big day, for State Farm.  TEXT ONLY orders were issued yesterday in two of the State Farm cases SLABBED is following:

State Farm’s stinky treatment of the Stink Shak

Unlike the earlier pro se who appeared to think legal representation was not needed for a judge to do his job, the owners of the Stink Shak feel they can not afford counsel according to their Response to State Farm’s motion for partial summary judgment on plaintiff’s claim for punitive damages.

We were hopeful mediation would resolve the issue…We made an attempt to lower our offer from $55,000 to $40,000 …the Mediator suggested we get an attorney due to the complexity of the Court’s procedures.  It is not possible to attain an attorney for the amount of our loss.

That may very well be true as State Farm spares no cost in litigating Katrina claims and an attorney would be reluctant to charge these plaintiffs, a married couple, the cost.

According to their complaint, she is disabled and he is retired and in poor health.

Our combined monthly SS income is $1600.  Out of apparent necessity, we opened the store to meet our growing obligation of taxes, insurance premiums, medication, etc.  On August 25, 2005 Hurricane Katrina destroyed the store.  We were fully insured with State Farm Insurance.  I met with the adjuster approximately two months later. It was obvious a tornado had hit the building.

Slabbed Daily July 9. Now this is cool

Our good friend Jim Brown plays the fiddle with Zydeco fiddler and Beausoleil member Mitch Reed. Enjoy today’s open thread.

Merlin: Insurance industry is using the “letter of the contract” to defeat the promise they sell

Here are two new posts on Merlin’s blog that are a great fit with Sop’s View from the trenches on the disconnect at the National Underwriter -Leading Insurance Academic Proves State Farm Accepts “Reasonable Expectations” of Insurance Coverage and Insurance Advertisements Stress an Expectation of Coverage and Service.

Both posts go to the heart of every Katrina case – the “illusory coverage” policyholders found they were sold and told would cover loss from a hurricane.

The first, Merlin wrote this past Tuesday:

Professor Jeffrey Stempel is among the best legal writers of matters pertaining to insurance. When reading his work, I often think “why can’t I explain my thoughts so clearly and eloquently?” Maybe that is why he is the insurance law professor, and I am in the middle of legal muck and controversies.

While following up on Saturday’s Post, “Fireworks are Loved by Americans–and Insurance Companies Seeking Not to Pay Fourth of July Fires,” where I quoted Barry Zalma at length for the proposition that insurance companies often advertise one product but sell another, I came across a related article on the LexisNexis Insurance Law Center written by Stempel. His article, March Madness Makes It “Official: State Farm Embraces the Reasonable Expectations Doctrine and Rejects Linguistic Literalism, is a must read for those trying to prove that even the industry leader recognizes what it advertises is not what it sells. This is the point I was trying to make in my post, “Is the State Farm Policy Really Worth Anything?“

I felt the following paragraphs best sum up Stempel’s points:

in pictures and with a 1000 words – the Congressman of the slabbed part Deux: Tweaking the vid

Thursday Music: An Inside Dedication to a reader

A view from the trenches: Stunning disconnect at the National Underwriter

Let them eat cake

-Marie Antoinette, who supposedly uttered the phrase during one of the famines that occurred in France during the reign of her husband Louis XVI.

Human nature never changes, only the people change, the pockets change, the suckers and the manipulators change, the wars change, the disasters change, the technology changes – but the market never changes. How can it? People never change and peope drive the market, not reason, not economics and certainly not logic. It is human emotions that drive the market, as they do most other things on this planet.

-Richard Smitten, The Amazing Life of Jesse Livermore World’s Greatest Stock Trader

Emotions must be understood and harnessed before successful speculation is possible:

• Greed – is a human emotion in all people, defined by Webster’s dictionary as: the excessive desire for acquiring and possessing. A desire for more than one needs or deserves. We do not know the orgins of greed, all we know is that it exists in every person.
• ……but hope, like its stock market cousins, ignorance, greed and fear distort reason.

-Jesse Livermore, From his trading manual

Mr. Praline: I’m sorry, I have a cold. I wish to make a complaint!
Owner: We’re closin’ for lunch.
Mr. Praline: Never mind that, my lad. I wish to complain about this parrot what I purchased not half an hour ago from this very boutique.
Owner: Oh yes, the, uh, the Norwegian Blue…What’s,uh…What’s wrong with it?
Mr. Praline: I’ll tell you what’s wrong with it, my lad. ‘E’s dead, that’s what’s wrong with it!
Owner: No, no, ‘e’s uh,…he’s resting.
Mr. Praline: Look, matey, I know a dead parrot when I see one, and I’m looking at one right now.
Owner: No no he’s not dead, he’s, he’s restin’! Remarkable bird, the Norwegian Blue, idn’it, ay? Beautiful plumage!
Mr. Praline: The plumage don’t enter into it. It’s stone dead.
Owner: Nononono, no, no! ‘E’s resting! …

-Monty Python’s Flying Circus Season 1 – Episode 08

I was reminded of all those quotes when I read the National Underwriter’ cover story from their May 26th issue that was authored by Sam Friedman that ran under the lede “Insurers Can Polish Their Image While Boosting Bottom Line“. Sam, whose blog was one of our original blogroll links here at Slabbed, felt compelled to author a companion peice on his blog that ran under the post title “Time for Some Tough Love on the Industry’s Image” no doubt fearing backlash from the insurance industry readers that support his trade journal. Both pieces left me stunned in how disconnected from reality Sam has become, his critical reasoning no doubt clouded by the revenue generated from the industry by his trade magazine. But before we analyze Sam’s column and blog entry we need to backtrack to last year and the posts we did on Sam’s indignation with the award winning Bloomberg story that detailed unscrupulous claims practices by insurers, “The Insurance Hoax“.

Sam called the work a “hatchet job” and did his best to torpedo it’s chances of winning the Deadline Club award for which it was nominated. He couldn’t be everywhere at once though and the cream truly does rise to the top so the Bloomberg piece, along with Becky Mowbray’s insurance reporting for the Times Picayune won awards from even more prestegiouos journalism trade groups than the Deadline club.

Sam was still steamed, especially after Dean Starkman at the Columbia Journalism Review subjected the Insurance Hoax to “the Audit” and found that the piece was indeed factually based, no doubt explaining it’s wide acceptance among professional journalists. Sam however, was having none of it prefering to remain in denial. So while I at the time I admired Sam’s passion we also got a peek at the partisan Sam, the one who Journalistic skills are clouded by the monetary realities of runnig a trade journal. One comment left on Sam’s original blog entry on the Insurance Hoax nailed it dead on, just like Monte Pyton’s dead parrot skit:

Do a consumer survey, or simply talk to your relatives and neighbors, for goodness sake! Ask them if they felt whether their insurer paid what was owed them. What more “proof” do you need?

Jim Brown on Bobby Jindal’s National Prospects: Make Louisiana a better place and the rest will take care of itself

You gotta love Jim, a former politician who puts his state ahead of his party. Bobby Jindal would be wise to take Jim’s good advice. sop

Thursday, July 9, 2009

Baton Rouge, Louisiana

IS BOBBY JINDAL STILL VIABLE NATIONALLY?

“Whatever happened to Bobby Jindal?” That is the question posed in this month’s Economist Magazine. “At one point he was the great hope of the GOP and now we hardly hear a word about him.” So is it time to begin writing obituaries about the Louisiana Governor’s once rising nation political ambitions? Maybe not yet, but Jindal obviously has his work cut out for him.

After Jindal’s less than stellar response speech to the President’s State of the Union address, the criticism came raining down, and he all but disappeared from any national view. The conventional thinking among Jindal’s staff of advisors was for him to lay low and let the “Kenneth-the-Page” fiasco pass. Let time be the healer, and then find the right opportunity for Jindal to re appear on the national scene.

The problem for Jindal is that by not staying visible outside Louisiana, the only impressions many political observers have of him is the “Little Ole’ Bobby moment” seen by millions this past February. The Governor did have his hands full in the recently ended session of the Louisiana Legislature. But timing can be everything in politics. And with other potential presidential contenders dropping out right and left (Governors Palin and Sanford, and Sen. Ensign to name the latest), Jindal could be missing important opportunities that could lead to a revitalized stature on the national scene. Just what could he begin to do that would draw favorable national attention?

First, jump head first into the national healthcare debate. When he was running for governor, Jindal played up his credentials as a healthcare policy wonk.

Slabbed Daily July 8: Dollar Bill Meets the Pillsbury Doughboy

US Government Photo (H/T The Times Picayune)

With Dollar Bill standing trial we only need one story for todays open thread. Lets visit with Stephanie Grace at the Times Picayune:

We may never know why former U.S. Rep. William Jefferson stashed $90,000 in his freezer rather than deliver the money to then-Nigerian Vice President Atiku Abubakar, as he promised a business associate who was secretly recording their conversations.

It may be that something went awry with the planned handoff, which was allegedly aimed at cementing a telecom deal in Nigeria. It may be that Jefferson had always intended to keep the money. There may be another reason entirely, one that would actually deliver on Jefferson’s “honorable explanation,” although as his trial in Virginia progresses, there’s no such explanation in sight.

This week’s evidence suggested an intriguing new alternative.

Recordings played in court Tuesday, when the jury finally watched investor Lori Mody’s climactic delivery of a briefcase containing the marked bills, suggested perhaps Jefferson held on to the money, rather than handing it off to Abubakar, because he suspected he was being watched.

The Commish sets up a “Stakeholder” Meeting. If he’d only invited all the stakeholders…..

I’ve been hanging onto Anita Lee’s story from June 27th (H/t Editilla for the ease in finding the link) on Insurance Commish Mike Chaney’s upcoming insurance forum for almost 2 weeks now trying to figure out how to make all the puzzle pieces fit. Puzzle pieces? Now our readers are confused too but perhaps not as temporarily disoriented as I was left after seeing the Commish that same weekend being interviewed by WLOX’s Dave Elliot late that Sunday night. It was only this week that I figured out the Mike Chaney dichotomy to the point where I can convey the man’s fundamental contradictions and the differences between Mike Chaney the politician and Mike Chaney the ideologue. I’ll begin with Mike Chaney the politician and his upcoming forum designed to coincide with the National Governor’s conference scheduled for later this month in Biloxi as we visit with Anita Lee and the Sun Herald:

A wide variety of measures aimed at improving the coastal insurance market will be explored at a multi-state insurance forum scheduled on the eve of the National Governor’s Association conference.

Mississippi Insurance Commissioner Mike Chaney expects key stakeholders at the conference, including insurance commissioners from coastal states, insurance industry representatives and mitigation specialists. Chaney also hopes Gov. Haley Barbour, who is on the agenda, will bring coastal governors with him.

“It’s top-notch,” said Joseph Ammerman, a spokesman for the Mississippi Insurance Department, the host of the two-day forum July 16 and 17 at IP Casino Resort. “We’ve got a great lineup of speakers. The commissioner has been telling everybody who has agreed to speak, ‘We want answers.’

“We want to come away from this conference with some strategies about how to make things better on the Coast. We’re looking for solutions.”

I’d submit Mr Chaney and MID isn’t looking too hard for answers because the speaker lineup, while impressive, does not include a single consumer advocate. Mr Chaney is an industry guy who evidently doesn’t see the need for a consumer perspective at his forums. Mike Chaney the pol is always quick to take credit for the state funds given the windpool by the legislature to reduce premiums and that is what left me confused. You see, Mike Chaney the ideologue doesn’t believe in insurance subsidies for consumers nor any solution that involves governmental involvement beyond providing a free government backstop to for profit insurers …at least according to the 14th draft of the National; Association of Insurance Commissioner’s whitepaper titled: Natural Catastrophe Risk: Creating a Comprehensive National Plan. I’ll start with the AM Best story on the whitepaper before we delve deeper into Mssrs. Chaney and Richardson’s dissent:

Weathers Bitch Slaps Eleuterius while the Supremes sing a new legal precedent song: An O’Keefe v State Farm update

We have activity in the Federal Case O’Keefe v State Farm and this time due to a somewhat unlikely source, the Mississippi Supreme Court. This is a good topic because it appears from the conduct of the Corban proceedings the Court is once again deciding cases based on legal precedent which had become somewhat of a rarity in recent years as Chamber of Commerce approved justices like Jess Dickinson issued several very curious rulings such as in Jenkins holding the statute of limitations for a wrongful death case begins at the point of injury rather than the death itself in a ruling that favored a corporate defendent at the expense of the deceased family as the deceased evidently lingered and lived too long after the injury for his estate to sue. The public spectacle of Mississippi’s highest court beclowning itself lead to a reversal of Jenkins though I suspect the family remains SoL, forever shafted by Justice Dickinson.

Such behavior out of this State’s highest court explains why I had no confidence the Supremes would do justice in Corban but I’ll admit I was very pleasantly surprised, especially that Justice Dickinson actually asked intelligent questions during the proceedings and appeared to be open to the law, no doubt with an eye to the electoral calender. Regardless of the reason I almost suffered a heart attack when I read the latest from O’Keefe and then discovered Justice Dickinson voted with the other justices to reverse a badly decided case against an insurer where the agent made material misrepresentations to the customer. The agent’s legal arguments that the cause of action was time barred due to the statute of limitations had originally prevailed in the lower courts. For the State Farm agent in question in O’Keefe, this ruling could not have come at a worse time.

Nowdy covered the legal arguments of SF agent Marshall Eleuterius that the O’Keefe’s claim against him was time barred due to the Statute of Limitations in a post from this past Monday. The Thursday before, however, the Mississippi Supreme Court ruling in Weathers v Met Life detailed above was handed down and team O’Keefe wasted no time letting the Federal Court know about Weathers and the nitty gritty details in the case, especially the parts where Stephens v Equitable was too restrictive:

…and you were expecting Patsy Cline?

Sorry but it’s just Nationwide; and, worse yet, the Company is singing way off key.

If you recall Judge Walker’s unfortunate decision granting Nationwide’s Motion for Mental Examination of Plaintiff in Politz v Nationwide, you may also remember Dr. Mark Webb is the psychiatrist Nationwide selected to conduct the examination.

He is also resume-lite.

Consequently, Counsel for Mrs. Politz filed the  Notice of Issuance of Subpoena to Produce Documents, Information or Objects seeking additional information on Dr. Webb’s qualifications and related experience.  SLABBED reported the Notice in a recent Katrina litigation update.

Yesterday – and apparently without reading Dr. Webb’s resume-lite -  Counsel for Nationwide filed a Motion to Quash the Plaintiff’s subpoena.

Nationwide claims the ten year time framed [sic] …is overly broad and burdensome and  many of…[the fourteen categories of documents]…have no relevance to the claims or defenses asserted by the parties to this action. Nor do these documents have any probative value on issues of any potential bias by Dr. Webb.

Nationwide is not Patsy Cline but those claims are Crazy:

Events from 1999 to 2009 are totally missing from his resume and only one dated 1999 is listed – overly broad, not!

Try lacks relevance:

Slabbed Daily July 7

There are a few news stories that attracted my interest so I’ll start the open thread today. First up Big Bay Lake is fixed and refilling (H/T The Sun Herald), no doubt much to the shragrin of the 100 or so homeowners who lost their homes when the dam there broke in 2004 that are stuck in litigation.  I am very familar with the area, especially the downstream areas in Lamar and Marion Counties including this bridge which suffered major damage when the dam broke. Such occurances illustrate why everyone should have flood insurance, even those living 300 feet above sea level.

Next up is a tragic story from Hancock County involving an boating accident on the Jourdan River. I personally know some of the people involved. I think some of the reader comments about that section of the Jourdan River being dangerous due to high levels of boat traffic is spot on. Our prayers are with the families.

Finally NFIP rates are going down in Biloxi thanks to a new flood plain rating for the city. Mary Perez filed the Sun Herald story:

Homeowners in Biloxi will see their flood insurance premiums drop 5 percent thanks to a new rating for the city.

“We’ve been notified by FEMA that our rating has improved to a Class 6,” said Community Development Director Jerry Creel. That means residents who live in Special Flood Hazard Areas and have National Flood Insurance will see a 20 percent reduction in premiums compared to the previous 15 percent.