INDIANPOLIS (Sept. 16, 2005)––The National Association of Mutual Insurance Companies (NAMIC) today issued the following statement in reaction to lawsuits being brought by Mississippi Attorney General Jim Hood against insurance companies handling claims related to Hurricane Katrina.
The following statement should be attributed to Roger H. Schmelzer, Sr. Vice President –State and Regulatory Affairs. NAMIC represents more than 1,400 member insurance companies, eighty-nine of whom write business in the state of Mississippi.
“It is outrageous for an Attorney General from a state that requires regulators to approve insurance forms to retroactively seek changes in coverage already scrutinized by Department of Insurance staff.
“The typical homeowner’s policy covers wind damage but not damage caused by floods. The National Flood Insurance Program has been in existence since 1968. To rewrite the insurance contract now is a grossly unfair outcome for consumers who have paid premiums for flood insurance.
“Attorney General Hood’s efforts to secure a temporary restraining order against insurance companies trying to pay claims could have profound, unintended consequences for Mississippians and the insurance industry in that state. If granted, the motion will effectively bring the entire claims paying process in Mississippi to a halt. Taking this action may have made a great headline, but its success will only leave people more confused than before.
“The legal actions proposed by the Scruggs Law Firm are an annoyance with potentially serious consequences for storm victims. Mr. Scruggs’ ‘trial by media’ methods are well-known. What may not be understood, however, is that when a Mississippi policyholder chooses to work with him, the insurance company is obligated by law to deal directly with Mr. Scruggs instead of the policyholder. In the end, his strategy will only result in further delay.
“The process of recovery is underway. Baseless legal action, by any party, will only serve to mire recovery in a judicial briar patch instead of getting claims settled and putting lives back together.”
Posted: Friday, September 16, 2005 12:00:00 AM. Modified: Friday, September 16, 2005 4:27:54 PM.
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