Insurance Transparency Project

(SEE ITP CORRECTIONS)

Transparent Ones,

Now up on the “Key Katrina/Insurance Documents” section” (click on “Scruggs/State Farm Settlement) is the settlement agreement announced yesterday between 640 policyholders and State Farm. This and more is posted by the Pulitzer-winning Sun Herald, next to another terrific story by the indispensable Anita Lee.

There are times when War Eagle can only shake his head sadly and tip his hat in professional admiration for the way State Farm and its powerhouse lead lawyer, Skadden’s Sheila Birnbaum, have deftly blocked any chance of obtaining relevant data about post-Katrina insurer performance.

The paragraph cited above, 8.17, says State Farm “will provide periodic reports” to the court, Attorney General Jim Hood and Commissioner George Dale on 1. the number of claims, 2. the number of claims resolved without arbitration, 3. the number arbitrated, 4. and all amounts paid, every three months until all Katrina claims are resolved. However, those reports are, as noted above, confidential and exempt from the Mississippi Public Records Act. The settlement makes these reports a “trade secret” and/or “confidential commercial and financial information.”

Please. Those kinds or reports are about much of a trade secret as Citibank “disclosing” how much it pays on a six-month CD. Or Boston Properties announcing what kind of dividend it’s paying. Or… ah, forget it. ITP is rousing its attorney, Buck, off the cot on which he sleeps and setting him to work on a third-party challenge to the settlement.

A belt-and-suspenders touch is found in paragraph 8.13.7, which says that class members (policyholders) can’t disclose their offer from State Farm to “any other person,” including –get this — “the Special Master,” the judge’s helper, without State Farm’s consent or as provided in Section 14 (don’t go there; it’s no help).

What can ITP say? This is old school. I’m sure my insurer pals will set me straight, but how are reports of aggregate claims data a trade secret? And if it hurts State Farm to be the only one disclosing such reports, what about if everyone does?

Hat tip to the best dang reporter in Mississippi.