Life’s Lessons Impact My View on Insurance Law and Policyholder Advocacy: Correcting Friday’s Blog and Giving Credit

As you read this post, consider these life lessons:

You can’t always get what you want
But if you try sometimes, well,
You just might find you get what you need

and

DON QUIXOTE
Hand over that golden helmet!

BARBER
But this is a shaving basin!

DON QUIXOTE
Shaving basin! Know thou not what this really is?
The Golden Helmet of Mambrino!
When worn by one of noble heart, it renders
him invulnerable to all wounds!
(to the Barber whacking the barrel with his sword)
Hand it over!

Thou Golden Helmet of Mambrino,
With so illustrious a past,
Too long hast thou been lost to glory,
Th’art rediscovered now at last!
Golden Helmet of Mambrino
There can be no hat like thee!
Thou and I now, ere I die now,
Will make golden history!

BARBER
(aside to Sancho)
I can hear the cuckoo singing
In the cuckooberry tree…

Most people never admit they made a mistake, even after reflecting upon it and knowing they have. I make plenty of them everyday and made one in Friday afternoon’s post, Amy Bach and United Policyholders Supports Mississippi Insurance Protections by not pointing out that the proposed Mississippi legislation may not accomplish enough to be worth anything and is worded incorrectly. Slabbed fairly slammed my post in "Merlin – Amy Bach and United Policyholders Supports Mississippi Insurance Protection" for failing to point this out, as they did in "Watered Down Policyholder Legislation Still Hanging on in the Mississippi Legislature."

Mississippi already has a very limited Policyholder Bill of Rights. I feel that the proposed requirement that the Policyholder Bill of Rights "must include a provision establishing reasonable time frames for the processing and payment of homeowners insurance claims" is something very worthwhile because delay of payment is the most common complaint of insureds following a loss. I also believe that eliminating the citation to the Fifth Circuit Court of Appeals decision in Leonard vs. Nationwide, 499 F.3d 419 (5th Cir. 2007), in the current Policyholder Bill of Rights is a valid change by substituting the language:

If a policyholder sues to recover under the insurance policy, the insurance company has the burden of proof as to the application of any exclusion in the policy and any exception to or other avoidance of coverage claimed by the insurer.

However, the following language in the proposed bill makes no sense:

Unless based on sound actuarial principles, an insurance company may not treat a policyholder differently from other individuals of the same class and essentially the same hazard when evaluating a claim.

Actuarial principles typically apply to rates and underwriting. They never apply to claims handling. Here are a couple of examples of how a slight modification of the proposed language may help policyholders:

Unless based on sound actuarial principles, an insurance company may not treat a policyholder differently from other individuals of the same class and essentially the same hazard when underwriting a policy.

or

Unless based on sound actuarial principles, an insurance company may not treat a policyholder differently from other individuals of the same class and essentially the same hazard when evaluating whether an application for insurance is acceptable.

So, is the quest of one motivated private individual, Kevin Buckel, to get a revised Policyholder Bill of Rights a practical attempt to add a little meaningful law for policyholders (assuming the wrong language can be corrected) or a Don Quixote waste of time that does more harm than good, as Slabbed suggests? Could it be a little of both?

United Policyholders noted Kevin Buckel in its 2007 Newsletter:

One person making a difference in Mississippi:
During the summer you’ll find Kevin Buckel keeping kids safe at the water park he manages, but since Katrina blew his home away, he’s become a self-taught citizen lobbyist working to enact a Policyholders Bill of Rights in his home state. With drafting and strategy help from UP, he’s refined the bill and is connecting with other MS citizens working to strengthen protections for policyholders in that state.

Visit Kevin’s site to read his proposal: http://www.msbillofrights.com/msinsurancebillforus.html, and check out “Homeowner Rights Battleground”
http://www.gulfcoastnews.com/GCNnewsHomeownersRightsBattleground.htm.

I give credit to Slabbed for demanding that my posts are accurate and that laws are written to make sense and advance justice. I also give all the credit to non-professional lobbyists, such as Buckel, who are actually meeting with our representatives, writing proposed legislation to advance policyholder rights, and trying to encourage others to take time and participate in our democracy. Policyholders need all the help we can get to protect our rights against the army of lawyers, public relation consultants, and governmental affairs types that the insurance industry has lobbying full-time in every state legislature.