If you don't already have a dart board with Edward Liddy's face on it maybe you should get one. Edward Liddy is the former CEO of Allstate Insurance and the current CEO of AIG. You know AIG from the television commercials and the fact they are most recently in the news for receiving bailout money to the tone of $50 Billion, some of you may even have them as your insurance provider.
On March 19th, Liddy sat in front of a congressional committee and explained why he feels $165 million of the federal bailout money should go to AIG employees as bonuses. Chairman Kanjorski questioned Liddy's priorities, pointing out Liddy's role and stance while at the helm of Allstate, Liddy's company denied contract insurance claims. Kanjorski asked why taxpayers should be forced to pay $165 million in bonuses to AIG employees on the basis of contract, when it appeared that Liddy had no problem denying insurance contract claims made against Allstate, his former company.
Liddy changed the way that Casualty insurance is done in the world. Edward Liddy completely redesigned how the Property and Casualty insurance company pays claims. Liddy implemented a plan to deny and otherwise underpay contract claims to Allstate policy holders. These plans and denials of your claims have secured over $350 million in salary and stock options for Mr. Liddy. To learn more about Mr. Liddy you can read the book, Good Hands to Boxing Gloves: How Allstate Changed Casualty Insurance in America.
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If you don't already have a dart board with Edward Liddy's face on it maybe you should get one. Edward Liddy is the former CEO of Allstate Insurance and the current CEO of AIG. You know AIG from the television commercials and the fact they are most recently in the news for receiving bailout money to the tone of $50 Billion, some of you may even have them as your insurance provider.
On March 19th, Liddy sat in front of a congressional committee and explained why he feels $165 million of the federal bailout money should go to AIG employees as bonuses. Chairman Kanjorski questioned Liddy's priorities, pointing out Liddy's role and stance while at the helm of Allstate, Liddy's company denied contract insurance claims. Kanjorski asked why taxpayers should be forced to pay $165 million in bonuses to AIG employees on the basis of contract, when it appeared that Liddy had no problem denying insurance contract claims made against Allstate, his former company.
Liddy changed the way that Casualty insurance is done in the world. Edward Liddy completely redesigned how the Property and Casualty insurance company pays claims. Liddy implemented a plan to deny and otherwise underpay contract claims to Allstate policy holders. These plans and denials of your claims have secured over $350 million in salary and stock options for Mr. Liddy. To learn more about Mr. Liddy you can read the book, Good Hands to Boxing Gloves: How Allstate Changed Casualty Insurance in America.
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The American Association for Justice, formerly known as the Association of Trial Lawyers of America, has released a report ranking the nation's worst insurance companies. The association says that the rankings are based on distinct patterns of insurance company greed among the 10 worst-ranked companies that refuse to pay valid claims, use hardball tactics against their policyholders, provide extravagant rewards and salaries to executives, and raise premiums while raking in excessive profits.
Researchers at the American Association for Justice spent six months gathering, extracting and compiling information from court documents, SEC and FBI records, state insurance department investigations, and complaints, nationwide news reports and testimony of former agents and adjusters that have worked for the insurance companies.
Robert Hartwig of the Insurance Information Institute, which is sponsored by the insurance industry, criticized the report and told the Sun Herald that consumers should take into consideration the fact that the study was conducted by trial lawyers, who he claims are overly litigious and help drive up insurance costs. Hartwig added that the insurance industry has paid out almost $300 billion in claims and settlements over the past 20 years to policyholders across the country.
While $300 billion seems like a gigantic number, they American Association for Justice points out that it is a drop in the bucket compared to the $1 trillion in insurance premiums that the insurance industry collects each year. The insurance industry also has $3.8 trillion in assets, which surpasses the Gross Domestic Products of all countries but the United States and Japan. With this tremendous amount of income and assets, payouts of nearly $300 billion over a 20-year period is hardly worth a pat on the back.
The study ranked Allstate at the worst insurance company in the country for consumers. Allstate disclosed $4.6 billion in profits in 2007 and paid CEO Thomas Wilson a $10.7 million salary. The company has assets valued at $156.4 billion. The study outlined a trend of Allstate paying out less and less claims over the years. The American Association for Justice concluded that Allstate systematically places profits over its policyholders.
Allstate spokesman Michael Siemienas said that while trial and personal injury lawyers may not like the company, the facts show that consumers do. Siemienas said that Allstate is not surprised to have been targeted in the study by trial and personal injury lawyers because the company has been a leader in the fight against insurance fraud and has pushed for resistance throughout the insurance industry to what it considers "unreasonable demands" by trial and personal injury lawyers.
Other companies on the top 10 worst insurance companies for consumers as ranked by the American Association for Justice included Unum, AIG, State Farm, Conseco, WellPoint, Farmers, UnitedHealth, Torchmark and Liberty Mutual. Among these companies, the study found those with a history of denying and delaying claims sought price increases during catastrophes and were charged with corporate fraud; one was even caught forging signatures of earthquake waivers after a deadly earthquake and altering engineering reports after Hurricane Katrina.
Other slimy behavior by the insurance companies that made the list included manipulating elderly policyholders, using secretive claim-evaluation software to lowball settlement offers that may not cover medical expenses and lostwages, and employing the "three D's strategy" that stands for deny, delay and defend.
The findings of the study serve to underline and emphasize the abundantly evident fact that insurance companies, their adjusters and employees love policyholders - as long as the premium payments continue to be paid and no claims are ever filed. After a claim is filed, their goal is to pay out as close to nothing as they possibly can.
By: Gerri L. Elder
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The name of the game in the insurance world is deny, delay, defend- --do anything to avoid paying claims. For companies like Allstate, there are corporate training manuals explaining how to avoid payments, portable fridges awarded to adjusters who deny the most claims, and pizza for parties to shred documents. The insurance infdustry is exempt from anti-trust laws. While the industry is regulated on a state level ( where not pre-empted by federal law) laws and regulations promoted by pro-business/anti-consumer governors (such as Mark Sanford of SC) give the industry unfettered ability "to rape and pillage" the consuming public.
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There is no greater poster child for insurance industry
greed than Allstate. According to CEO Thomas Wilson,
Allstate's mission is clear: "our obligation is to earn a
return for our shareholders." Unfortunately, that dedication
to shareholders has come at a price. According to
investigations and documents Allstate was forced to
make public, the company systematically placed profits
over its own policyholders. The company that publicly
touts its "good hands" approach privately instructs
agents to employ a hardball "boxing gloves" strategy
against its own policyholders.
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