SPECULATING ABOUT THE FINANCIAL HEALTH OF INSURANCE COMPANIES OTHER THAN AIG IN PENNSYLVANIA AND HOW IT AFFECTS CLAIMANTS
As a Pennsylvania insurance claims attorney, with a 30 year history of representing catastrophically injured plaintiffs and disputes against insurance carriers solely on a contingent fee basis (we don’t get paid until we win), obviously the financial concerns of the insurance companies and their ability to pay claims is on the front burner in our law firm. In the past few weeks, AIG has been front and center in the headlines. This was followed by an incident with Conseco which was written about in my blog of October 13, 2008.
On October 1, 2008, Senate Majority Leader Harry Reid emerged from a luncheon on Capitol Hill and after speaking briefly to reporters about the financial crisis, mentioned that another insurance company was in danger of following AIG into failure. He mentioned “one of the individuals in the caucus today talked about a major insurance company, with a name that everyone knows, that’s on the verge of going bankrupt.” The Senator stopped short of identifying the insurance company. However, the stock market acting in a nervous fashion revealed that shares of Prudential, Hartford Financial Services and MetLife decreased in value on the following days and have been struggling to recover. The rumor mill continues to circulate rumors and facts, non-facts and supposed facts about various individual companies, solvency of insurance companies, and general doom and gloom predictions. Shares of stock in insurance companies fluctuated wildly on the New York Stock Exchange. Prudential Financial warned last week that it would miss third quarter forecasts due to a series of hefty charges on negative results of investments. MetLife recently raised an additional $2 billion dollars in capital by selling 75 million shares at a discount, while Hartford Insurance Company received a $2.5 billion capital injection from German financial services company, Allianz. To make matters worse, many insureds can no longer afford rising rates.
Headquartered in Kansas City, Missouri, The National Association of Insurance Commissioners (NAIC), is a voluntary organization of chief insurance regulating officials of 50 states, the District of Columbia and 5 U.S. territories. The NAIC’s overriding objective is to assist state insurance regulators in protecting consumers and helping maintain the financial stability of the insurance industry. They have been closely working with the insurance departments and regulators of various states across the nation to protect policyholders and to insure the solvency of insurance companies and their subsidiaries.
While I have no doubt that the long-term implication of the resolution of this crisis will not be too detrimental for the insureds, the short-term impact is that insurance companies seemingly are treating their insureds like “criminals”. The American Association for Justice has just identified the ten worst insurance companies. (American Association for Justice) The report cites that the name of the game in the insurance industry today is deny, delay and defend and to do anything to avoid paying claims. For companies such as Allstate, there are even corporate training manuals explaining how to avoid payments. Former Allstate insurance adjusters say they were rewarded for keeping claim payments low, even if they had to deceive their customers. According to the report, former Allstate adjuster, John Katzman, states “We were told to lie by our supervisors. It’s tough to look at people and know you are lying.” For more information, see the article by David Dietz and Darrell Preston entitled “The Insurance Hoax” Blumberg News, September 2007 (Blumberg News article); “In Tough Hands at Allstate”, Business News May 1, 2006 (BusinessWeek article); and the book “From Good Hands to Boxing Gloves, by David Berardinelli, Michael Freeman and Aaron Deshaw.
As a practicing Pennsylvania insurance claims attorney for almost 30 years, I can state that the climate of claimants versus insurance company is the most adversarial and roughest ever. The companies struggling to stay alive and in poor financial shape have discovered that the way to hold onto monies or stay afloat is either to pay out less as evidenced by increasing tactics of delay, deny and defend claims or not to pay at all. We find ourselves filing more bad faith actions against insurance companies than we have in the history of our law firm. Many companies practice with the strategy if they wait long enough to pay out a claim, the customers will weaken, particularly in these hard economic times. I have had some very frank discussions with insurance adjusters and attorneys for the insurance companies who acknowledge this fact.
If you have questions regarding the solvency of your insurance company, please contact the Pennsylvania Insurance Department, Bureau of Consumer Services at 1-717-787-2317 or visit their website at www.ins.state.pa.us.
The experienced Pennsylvania insurance claim firm of Reiff & Bily has been representing catastrophically injured individuals since 1979 and has had a multitude of experience playing hardball with insurance companies, insurance company liquidations, insolvencies, defaults and the bankruptcy of insurance companies.
We are all too familiar with the hardball tactics of insurance companies and we welcome the opportunity to put our clients on level playing ground with any of these companies. You deserve to get paid for your claim and deserve not to be taken advantage of. Our track record of success speaks for itself. If you have any concerns regarding any insurance claims you may have or any of the issues set forth in this article or you were involved in an accident or claim with an insurance company and they are refusing to pay you the money you deserve, please feel free to contact us for a free consultation at 1-800-421-9595 or online at www.reiffandbily.com.
