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Lott Insurance Industry Reform Bills...

Lott Insurance Industry Reform Bills Get Senate Commerce Committee Hearing

By: Magnolia Tribune - April 12, 2007

Lott Insurance Industry Reform Bills Get Senate Commerce Committee Hearing

Three bills advocated by U.S. Senator Trent Lott of Mississippi to reform the insurance industry in the wake of Hurricane Katrina were the subject of a Senate Commerce Committee hearing today.

Senator Lott has introduced bills requiring homeowners? insurers to disclose in plain English exactly what their policies cover and compelling automobile insurers to provide consumers access to data on severely damaged, stolen and flooded vehicles. Senator Lott is an original cosponsor of legislation introduced by Senator Patrick Leahy of Vermont to repeal the insurance industry?s antitrust exemption under the McCarran-Ferguson Act.

The oversight hearing on the property and casualty insurance industry heard from a panel of witnesses that included Mississippi Attorney General Jim Hood, the Consumer Federation of America?s Director of Insurance and a representative of the National Automobile Dealers Association, all of whom expressed support for Senator Lott?s legislation.

Senator Lott said that passage of his legislation would go a long way toward ensuring that consumers get fair treatment from insurance companies, including affordable and reasonable rates.

A member of the Commerce Committee, Senator Lott, in advocating the need to repeal the insurance industry?s right to collude among companies, read into the hearing record a 2005 email exchange between two employees of a North Carolina forensics firm discussing how State Farm Insurance had forced engineers to change its initial findings of claim attributing damage from Hurricane Katrina to wind, to instead attribute the damage to flooding which was not covered by insurance policies.

Senator Lott had said that as he witnessed the behavior of the insurance industry in its response to Katrina policy holders which left thousands of homeowners with a slab, a mortgage payment but no insurance policy payout, he became curious about the history, rationale and wisdom of such a broad exemption from federal oversight. ?When I researched the history of the exemption, I was astounded by what I found,? he said.

Completion of today?s Commerce Committee hearing means Senator Lott?s legislation is closer to consideration by the full Senate. The antitrust repeal bill had a full hearing last month in the Senate Judiciary Committee which plans to report out the bill to the full Senate.

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Senator Trent Lott

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This article was produced by Magnolia Tribune staff.