Hurricane Katrina: Two Eyewalls?
Eye Fans:
First, Allstate filed a Form 8-K last week with the Securities Exchange Commission, required to tell shareholders of any significant event affecting a public company, including bankruptcy, merger, or the like.
Allstate says it is the subject of a criminal investigation by U.S. Attorney Dunn Lampton, in the Southern District of Mississippi.
Allstate is the “registrant”:
“The Registrant has received a subpoena from a U.S. Grand Jury sitting in the Southern District of Mississippi. The subpoena is part of an ongoing investigation into the insurance industry’s handling of Hurricane Katrina claims in Mississippi. The Registrant is working with the U.S. Attorney’s office regarding Registrant’s efforts to comply with the subpoena. The Registrant remains confident in its claim settlement practices following Hurricane Katrina and is committed to resolving all claims fairly and appropriately.”
Nationwide made a similar announcement.
The significance is hard to overstate. This shows that the federal criminal investigation into post-Katrina claims handling has spread from Lampton’s subpoena of records from a bad-faith finding against State Farm following a 1999 Oklahoma tornado, to target Allstate and Nationwide specifically. We don’t know if State Farm, which is not a public company, has gotten a subpoena.
The reason this is more important than Attorney General Jim Hood’s criminal probe is that, unlike a state official, a federal prosecutor isn’t required to worry about the state of Mississippi’s insurance markets, whether insurers will write new policies, and has no incentive to accept a civil settlement of criminal charges.
Much as insurers would like to close the books on 2005, I really don’t see this going away.
Ok, this excellent story from NBC’s Mobile outlet provides more support, if any were needed, that wind indeed did damage to houses on the Gulf Coast. The story reports that a University of South Alabama associate meteorology professor who cames up with an answer to a puzzling question: If Hurricane Katrina was basically a Category 3 hurricane on a scale of 5, how could it do some much damage?
The answer, according to some new data presented by Prof. Keith Blackwell, is that the storm had two eyewalls, an outer one and an inner one, a fairly rare event apparently for hurricanes hitting land.
“Dr. Blackwell says the double eye wall explains the size, destruction, and power of Hurricane Katrina. From Louisiana to the Mississippi-Alabama state line, residents in those three states were hit twice by the storm’s powerful winds and waves.
“By the time the storm was making landfall in Louisiana and the eye was near the mouth of the Mississippi River, the outer eye wall was well developed and already affecting the coast of Mississippi.”
Actually, this doesn’t strike me as exactly new. The two-wall theory has been bouncing around the coast for some time. Anyone out there with data on this, please forward to ITP.
Prof. Blackwell says, however, that most meteorologists missed the outer wall because they used “older technology,” according to the story.
“It couldn’t penetrate the outer cloudy layer, but microwave satellite imagery can. This newer technology allows you to see into the storm, and it was this technology that revealed Hurricane Katrina had a double eye wall. “
Thanks again to Ida.