Advocacy Group Calls for Reform; Report Based on Insurance Policyholders' Complaints
Biloxi Sun Herald (Mississippi)
January 12, 2006


The insurance industry's "troubling" response to Hurricane Katrina demonstrates the need for reform, a consumer advocacy group concluded in a report released Wednesday.

"Insurance should be a policyholder's road to recovery at times of personal crisis," said J. Robert Hunter, a report author and former Texas insurance commissioner. "After Katrina, many insurance companies have too often been more like stone walls, blocking the way for policyholders to recover."

Americans for Insurance Reform released the report, which is based on complaints received from Mississippi and Louisiana residents after Hurricane Katrina hit Aug. 29. Of 500 calls received, 20 percent were from Mississippi, according to the Center for Justice and Democracy, which contributed to the report and sponsors Americans for Insurance Reform.

The groups have fought the efforts of the insurance industry and other businesses to limit jury awards in personal injury cases.

The Insurance Information Institute, an industry trade organization, said insurance companies are doing their best, given the disaster's magnitude.

"You've got an incredible number of claims," said Carolyn Gorman, an institute vice president. "It's been a very difficult situation for insurers, but they're working it the best they can.

"People should be paying insurance premiums based on the real risk and if that happened," Gorman said, "probably a lot of structures would never be built."

Americans for Insurance Reforms wants Gulf state insurance commissioners to order a moratorium on policy cancellations and non-renewals and to freeze insurance rates.

For a copy of the complete article, contact AIR.