"Comprehensive and precedent setting legislation was approved this week by the Florida legislature to address property insurance problems." 

The bill provides insurance industry accountability, including higher reserves for “pup companies,” prohibition of “cherry picking,” an oath of truth in rate filings, temporary suspension of “use and file” and arbitration, and expedited payment of claims. Specific now:

• Prohibit excess profits by property insurers and require return of excess profits to policyholders.

• Require all Florida-only subsidiaries to have a surplus of at least $50 million in liquid assets to help ensure that policyholders can receive payment when they need it.

• Require an oath of truth, with penalty of perjury, for rate filings. Rate filings must be signed by the insurance company’s CEO or CFO and actuary.

• Suspend the “use and file” procedure for rate increases. Insurance companies will have to seek and obtain OIR approval before implementing a rate increase.

• Require insurance companies to evaluate the hurricane-security of a structure rather than the date of construction when determining risk. Age of the home may not be used as the sole reason for rejection of coverage.

• Require any insurance company that writes homeowners policies in other states and writes auto insurance in Florida to sell homeowners insurance in Florida.

• Insurance companies must pay or deny property claim within 90 days of notice of the claim.

The above is from this BocaNews.com article. Click here.

In todays (1/24/2007) headlines there are plenty of articles on this story.  Listed below are some quotes from a few of the articles.

From the State Farm Press ReleasePress Release

"GULFPORT, MS., (January 23, 2007)-- State Farm will participate in a court supervised  resolution process to reconsider and fully resolve claims from Hurricane Katrina in three Mississippi coastal counties.  The process is part of an agreement reached through the settlement of a class action lawsuit against the insurer by families who believe their damage claims were not adequately resolved. This agreement can affect some 35,000 Mississippi families, if approved by the U.S. District Court in Mississippi overseeing hurricane litigation." ...

 "The agreement settles lawsuits filed by 640 homeowners and allows thousands of others to reopen damage claims that State Farm previously closed. Insurance executives said they expected the outlines of the deal to be adopted by other carriers. " (article)

"State Farm Fire & Casualty Co. agreed Tuesday to settle hundreds of lawsuits by policyholders and reopen and pay thousands of other disputed claims, a landmark deal potentially worth hundreds of millions of dollars for Mississippi homeowners devastated by Hurricane Katrina." (article)

"A “class action” component of the deal requires the company to reopen and review claims filed by roughly 35,000 policyholders who live in Mississippi’s three coastal counties but didn’t file lawsuits against State Farm.

After reviewing those claims, the company will be required to make new offers. Any disputes will be heard by an arbitrator whose decision would be binding."  (article)

"GULFPORT, Miss. — State Farm will participate in a court-supervised resolution process to reconsider and fully resolve claims from Hurricane Katrina in three Mississippi coastal counties as part of an agreement reached through the settlement of a class action lawsuit against the insurer by families who believe their damage claims were not adequately resolved. You can find additional articles on the CADO home page under the "Katrina Claims" tab.

The agreement can affect 35,000 Mississippi families, if approved by the U.S. District Court in Mississippi overseeing hurricane litigation, and is the result of negotiations between State Farm (the largest property insurer in the state) and the Scruggs Katrina group." (ABRN Article)

You can join a dicussion on this subject in the forum, click here for the thread.

You can find additional articles on the CADO home page under the "Katrina Claims" tab.

You can chat about it the Chat Room

From the ISO Press Release;

JERSEY CITY, N.J., January 16, 2007 — In the past year, ISO’s Property Claim Services (PCS) unit identified 33 catastrophe events. Together these events cost insurers an estimated $9 billion. PCS also estimates that insurers received 2,272,000 claims for damage to personal and commercial properties and vehicles. Personal lines claims accounted for 58 percent of the total, while commercial lines claims were at 9 percent and vehicle claims at 33 percent.

The 33 events caused insured property damage in 34 of the 50 states and the District of Columbia. Following are the states with the largest losses:

State	Loss ($)
Indiana	$1.5 billion
Missouri	$878 million
Tennessee	$873 million
Texas	$688 million
Kansas	$601 million

>> click here for the full release <<<

Article information provided by William Cook

From the article on AIR Worldwide Corporation's website:  http://www.air-worldwide.com/_public/html/air_currentsitem.asp?ID=1097#

"Editor's note: The U.S. winter storm season has been one of extremes this year, thanks to El Niño conditions over the tropical Pacific and the position of the jet stream (which has remained further to the north than is typical for this time of year). While the Northeast has been enjoying what could almost be described as balmy weather, the Pacific Northwest was hit in mid-December by the worst storm in a decade, and Colorado has been buried under a series of snowstorms that have resulted drifts nearly 15 feet high in some parts of the state.

This year's winter weather highlights the three components that make up the AIR U.S. Winter Storm Model: temperature, wind and precipitation. This season, however, only the Pacific Northwest winter storm has resulted in any significant insured losses. That storm brought high winds and heavy precipitation to much of Washington and Oregon over a two-day period from December 14-15. In its ALERT posting following the storm, AIR estimated that insured losses could reach as high as $500 million. Preliminary analyses of client claims data and PCS estimates for Washington and Oregon suggest that the AIR model performed quite well in real time.

While snow accumulations in Denver have been considerable, property damage thus far has not. The reason goes to the question of which is more important: snow depth or snow weight. AIR Director of Atmospheric Science Pete Dailey addresses this below in the second installment of our series on climate research."

Covered in the article:

• What's More Important: Depth or Weight?
• Why is Snow Load (Weight) Important?
• How is Snow Load Modeled?
  
  

My last check found 949 articles on the web about this, making it a hot subject.  Here are some quotes from one of the articles.

"GULFPORT, Miss. - A jury awarded $2.5 million in punitive damages to a Mississippi couple because State Farm Fire & Casualty Co. Inc. denied their Hurricane Katrina claim. The decision could benefit hundreds of other homeowners challenging insurers for refusing to cover billions of dollars in storm damage."

$2.5 million in punitive damages? In a homeowner's claim! Reminds me of a mold case.

"Earlier yesterday, U.S. District Judge L.T. Senter Jr. took part of the case out of jurors' hands before they awarded punitive damages to State Farm policyholders Norman and Genevieve Broussard of Biloxi.

Senter ruled yesterday morning that State Farm was liable for $223,292 in damage to the Broussards' home caused by Hurricane Katrina. He left the question of punitive damages up to the jury.

Senter's decision to make a directed verdict rather than let the jury decide the entire case appeared to surprise everyone in the courtroom."

What does this mean to the industry?

We also have a current discussion in the forum, >> click here to read or join that dicussion<<

>> click here to see all of the articles on this subject <<