Q & A with Senator Ben Brooks re Insurance Reform

For many years the law firm of Boteler, Finley &Wolfe has been advocating for insurance reform in Alabama to help individuals and small businesses with the issue of rising insurance premiums, diminishing benefits and coverage and what we consider to be unfair claim practices. During his tenure in the Alabama Legislature Senator Ben Brooks of Mobile has been an advocate in our State, and specifically along the Gulf Coast, for insurance reform for homeowners and small businesses. Recently Mark Wolfe of BF&W sat down for a Questions and Answers session with Senator Ben Brooks on the topic of insurance reform.

Wolfe: Senator Brooks since your election to the State Senate in 2006 you have been working for insurance reform in Alabama. Can you tell us why this issue is so important to you?

Brooks: Progress on the issue of property/homeowner's insurance reform is profoundly important to the future of our entire region and state. The insurance crisis impacts economic development, job creation, the availability of housing, and the affordability of housing. It negatively affects people from all walks of life and significantly impacts our business community. Reform in the area of property and homeowner's insurance simply must be a top priority for our community. We should approach the issue in a manner similar to how we would rally to seek a major economic development.

Wolfe: Early on in your attempts to push through insurance reform legislation, some of your colleagues in North Alabama were reluctant to support your initiatives claiming it would only benefit individuals and businesses on the Alabama Gulf Coast. Since the devastating tornadoes in April 2011, do you think your peers from those areas that were hit by the tornadoes will be more interested in this issue?

Brooks: Many of us have argued for years that the property/homeowner's insurance issue is a statewide issue. However, in the first few years of the insurance reform effort there were many hurdles to our efforts. Among these hurdles were occasional sad displays of partisanship and occasionally some lack of support from some other geographic regions. Frankly, over the years the geographic political issues began to decline as we made our case for reform.

When the tornados hit the central and northern areas of our State the first concern for legislators along the Gulf Coast was to seek out ways to help our brothers and sisters to the north. Our prayers and thoughts went out, and continue to go out, to those who suffered the terrible tragedies.

Since the tragedies in 2011 some in the insurance industry have announced the cancellation of tens of thousands of policies in areas north of Mobile and Baldwin Counties. Some legislators in the north and central areas of our state are now working more closely on the matter of insurance reform. It was an honor to work with Senator Gerald Allen of Tuscaloosa after the tornados in 2011 to add additional relief provisions to one of my reform bills. These new provisions expanded the bill to include other parts of the state other than Mobile and Baldwin Counties. We expect this will occur more and more frequently.

Wolfe: A few years ago ALFA Insurance Company was critical of you and your attempts to bring about legislation for insurance reform. What is the basis for their concerns and have you considered the economic interests of the insurance companies on the issue of reform?

Brooks: Without question some in the insurance industry have been more willing to talk about insurance reforms than others. Each of the industry representatives should have to outline why they in the past took a particular position in opposition to reform. However, in general it often seems that when legislation is proposed that may result in changes to the status quo, then some interests are automatically resistant. This has been true in the insurance reform effort as well.

We have a crisis of both availability and affordability in the homeowner's insurance area. Legislators on all sides understand that under our economic system we must and we should do everything we can to improve and strengthen the insurance marketplace. A state-owned insurance company is not the answer.

Wolfe: Have you done research on this issue as far as reform measures adopted and implemented in other States? And, have any other States been able to effectively help individuals and small businesses with their insurance reform measures? If so, what reform measures from other States do you think might be beneficial in Alabama.

Brooks: When I was first elected in 2006 I spent most of my first year in the Senate surveying the insurance reform ideas of others and surveying what a number of other states had done. I found two basic models. First, the Florida model basically meant that Florida started a state-owned insurance company. Under this approach the budget of the State of Florida could be significantly and negatively impacted in the event of a catastrophic event.
An example of the competing approach was the reform enacted by South Carolina. South Carolina primarily sought to improve and promote the private marketplace. In its broad omnibus bill South Carolina included a restructuring of its residual carrier (wind pool), added greater consumer representation on the board of its wind pool, created tax incentives to encourage the expansion of coverages, and added incentives to strengthen existing homes, among many other ideas. Many of the bills I have pursued in Alabama were influenced by the South Carolina approach.

Wolfe: To date, what do you consider as your best accomplishment on the issue of insurance reform?

Brooks: It would be hard to single out one item as a "best accomplishment". However, I suppose I am most proud of just how much the overall insurance reform effort has grown. We really are part of a broad movement now.

In the early days of our efforts there didn't seem to be that many people talking about this crisis. Today we have many people and groups working hard to find solutions. It would be an honor to think that I might have had at least a small role in helping to get that movement started. There certainly is still much work to be done, but sort of like the theme of the movie "It's a Wonderful Life", I do believe that things are better right now versus what they might have been if we all had not been working on this issue.

There are parts of this insurance crisis that would be difficult for any single state to solve. For instance, the cost of international reinsurance is a significant factor in the escalating price of homeowner's insurance. "Reinsurance" is generally provided by large international entities over which Alabama alone would have little influence.

However, there are a number of things we can do in Alabama. Among the bills we've already passed are:

1. Authorization for the creation of captive insurance companies in the context of commercial or homeowner's insurance (this was previously prohibited under Alabama law).
2. The imposition of mandatory insurance premium discounts for homeowners that voluntarily retrofit (strengthen) existing homes or who build new homes to higher standards. This bill is now being used as a model in other states.
3. The creation of the "Strengthen Alabama Homes Act" which established a trust fund under the control of the Alabama Insurance Commissioner through which grants would eventually be available for homeowners to retrofit existing homes and get insurance discounts.
4. Codification of the state "wind pool".
5. Requirement that state filings by insurance companies seeking rate increases must be made public records.
6. Revisions to state regulations so that the state insurance commissioner could more quickly approve the entry of new surplus lines insurance companies into the Alabama market.

There are also a number of bills being pursued and new ideas being explored. They include:

1. Requiring industry transparency in terms of premiums, claims and losses.
2. Restructuring and strengthening the "wind pool" (AIUA).
3. Adoption of tax incentives to encourage private carriers to take individual policies out of the state "wind pool".
4. Evaluation of a tax-deferred catastrophe reserve to encourage the restoration of the market.
5. Studying the modeling systems used by the carriers to evaluate risks and premiums which the industry asserts are actuarially valid.
6. Evaluation of alternatives to strengthen the market to attract a larger industry presence and improve availability.
7. Consideration of alternative insurance products, such as larger deductible products with a catastrophic backstop.
8. Enactment of an insurance fraud law.

Wolfe: What do you think individuals and small business owners can do to help bring about meaningful insurance reform legislation in Alabama?

Brooks: The most important thing that individuals and small business owners can do is to continue to make sure that their elected and civic leaders know how strongly they feel about the need for reform. In 2011 the Governor's Affordable Homeowner's Insurance Commission met in Mobile and there was "standing room only". This sent a strong message to Montgomery about how strongly we feel about this problem. There will be many other such opportunities for us as individuals and in group settings. We must all take political ownership of this difficult issue. Our voices do make a difference.

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For more information please visit,

Insurance Reform in Alabama

Senator Ben Brooks
　
　
　
　

Alabama's Need for a New Constitution

The following article is from Karlos Finley who currently serves on the Board for Alabama Citizens for Constitutional Reform

(News from the Constitution Revision Commission)
It's hard to find any reasonable person who'll make a serious defense of Alabama's decrepit Constitution. It's the longest in the world, it has been amended more than 850 times, it centers most all the power in the state in special-interest-controlled Montgomery and binds local governments.

For some time, The Alabama Citizens for Constitutional Reform has lobbied for some action, any action, to bring the state’s complex, cumbersome Constitution under control. Their preferred method to do so is a popularly elected constitutional convention. This was how the 1901 Constitution was created in the first place. Opponents of this plan claimed an election would lead to special interests taking over the convention and, thus, writing the new constitution. But it should be noted that it was not so much fear that special interests would dominate the convention. Instead, it was fear by some special interests that interests other than their own would prevail. That gets us to the first fundamental point about constitutional reform that we must understand. The state Constitution protects a wide range of special interests, so it stands to reason that special interests from agriculture to education would be wary of changes they could not control. Those changes would be in the state’s antiquated, inadequate and regressive system of raising revenue. Propertied interests would not want changes in the way the state taxes property. Education interests would not want changes in the way revenue is divided.
Enter the state Legislature and the 16-member Constitutional Revision (not reform) Commission.

And, to make sure the commission does not tamper with what is really wrong with the Constitution, tax reform is off the table. So, why bother? Because there is more wrong with the Constitution than taxes. Although business groups, like other special interests, opposed a constitutional convention, they also understood that matters such as local control and decentralization needed to be addressed. So they threw their support behind the commission plan that is in place today. Despite the limitations placed on it, the Constitutional Revision Commission is a step in the right direction. The commission will rewrite 11 of the constitution's 18 articles to put before the Legislature and voters. It leaves untouched the taxation article, which includes limits born of the 1901 convention that keeps a lid on property taxes. Those provisions contribute mightily to Alabama having one of the nation's most unjust tax systems.
Federal Judge Lynwood Smith wrote in his 854-page ruling that Alabama's property tax system does not violate the U.S. Constitution, however Smith practically begs for a federal lawsuit that challenges the validity of the Alabama Constitution because, as has been well-documented, supporters stole the referendum that approved it. The 1901 Constitution is the state's fundamental charter, "only through fraud, ballot theft, economic and physical intimidation and unmitigated corruption," Smith wrote.

In an October Revision Commission meeting Mobile Republican Sen. Ben Brooks, a commission member, wondered whether Jefferson County could have avoided its crisis with "more liberal home rules," the ability of Alabama cities and counties to have limited autonomy to pass laws without needing the approval of the Legislature. Sonny Brasfield, Executive Director of the Association of County Commissions of Alabama, told him the fight over the county's occupational tax showed how hard it is for counties to solve problems on their own. "I think that if the Jefferson County Commission had more authority, they wouldn't have to be up here seeking an answer to the problem," Brasfield said. Some, including lawmakers, have portrayed Jefferson County as a poster child for why counties don't need any more power. The way the constitution reads currently, we can't amend local laws once they get advertised.. We can't debate a bill, find a middle ground, and can't improve it as the legislative process goes along. Brasfield said the system fosters horrible local laws. Jefferson County found out the hard way what happens when the Legislature bucks the process. In 2009, lawmakers passed a new county occupational tax to replace one that courts had ruled invalid. But it, too, was struck down because lawmakers changed the bill from what had been advertised. Finding a better way for local elected officials to make local decisions... not arguing over taxing authority, should be the focus of the revision commission's work, Brasfield said. "I don't want us to get distracted from reaching the conclusion we need, which is change," he said. The local government and its voters would decide which option for change they prefer. What shouldn't be an option is the current silliness. Argue, if you will, that Jefferson County having mucked up so badly makes it the perfect case against home rule. But fixing that mess is the perfect case for it. As Commissioner Brasfield points out, "Does it make sense that the Alabama Legislature has to be called into special session to deal with Jefferson County's financial problems? Should senators have to come from Mobile and Huntsville to Montgomery to work on a solution for Jefferson County?

Alabama's Constitution Revision Commission met Wednesday, January 18, 2012 for the last time before the 2012 legislative session to discuss home rule; while proposals were discussed to give local governments new powers. Brasfield presented the commission with five recommendations for county government. Craig Baab, a senior fellow with Alabama Appleseed, proposed giving counties limited home rule, with an option for counties to opt out or to repeal it. Baab said the centralized government created by the 1901 constitution "doesn't serve the people well." Any changes proposed by the commission would be submitted to the Legislature in the form of constitutional amendments. Should the Legislature approve the changes, the amendments would be submitted to voters for approval.

The proposals, however, drew strong criticism from several people who spoke at the meeting. Supporters of home rule were equally adamant that zoning power would allow counties to guide their development and protect property owners from potentially ruinous neighbors. The commission is reviewing 11 of the 16 articles of Alabama's 1901 Constitution. The commission will not address Article XI, which addresses taxation. The commission late last year approved changes to remove the racist language and changes to the banking and corporations articles. The Legislature should consider those proposals during the next regular session.

AVVO.com is the Best Online Attorney Directory

The cyber geeks at NetNews have rated AVVO.com as the best online attorney locating service. (See article below.) All three attorneys at BF&W have the highest rating possible from AVVO.com. It's a great site for legal consumers. www.avvo.com

AVVO.COM: Best Online Attorney Locating Service
NetNews.Net - December 1, 2011
-NetNews.Net © In the fast paced world of internet searching, one of the most congested search areas for internet users is in the area of locating a lawyer. The world wide web has done a wonderful job of bringing lawyers and lawyer locating services to our finger tips, but maybe, just maybe it’s brought consumers too much information.

A simple non-scientific review of internet searches for attorney locating services brings forth listings of well over 1,000 such services not to mention hundreds of paid ads flopped and pixelated throughout the pages. Add to this confusion the fact that many of the attorney directories on the internet and/or attorney locating services require the attorney to "buy-in" to receive a favorable listing or ranking and you begin to see the internet consumers dilemma when searching for an attorney.

But fear not, your friends at NetNews.Net have searched, reviewed and analyzed these digital repositories of legal service providers, a/k/a shark holding pens, and found that one of these services rises above the rest and warrants our designation as: The Best Online Attorney Locating Service. Obviously if you read the headline you know we are giving this distinguished designation to AVVO.com. Before making the points that led to this conclusion, readers should know two important facts: One, our research is non-scientific but all attempts have been made to analyze and review the online attorney locating services from the perspective of the reasonable internet user who brings forth his or her common sense when searching the internet for information. Two, AVVO.com has paid us to write this review. Not true but it was too easy of a joke to drop in. We have not been paid for this review and as with all reviews, we are simply trying to aid and assist our cyber-peers.

OK, with all joking and tongue-in-cheek commentary aside, why is AVVO.com the best online attorney locating service currently on the internet? Simple, besides offering an ability to "locate" an attorney it combines what we consider the three best qualities of these type services into one web site. These three quality factors are 1) Ratings, 2) Reviews and 3) Q&A Forum. Too many of the online directories we reviewed had none of these quality features. Many others were obviously "buy-in" sites with limited listings and information and featuring only those attorneys who paid for their exclusive listing. We liken these type buy-in sites to your late night sleazy Personal Injury TV ads .... we give these type sites high marks under the "ambulance chasing" category. Several of the other sites we reviewed had one or two of what we considered as the quality factors and they make our "Honorable Mention" roll below. AVVO.com, nor any of the other "Honorable Mention" services, require an attorney to pay to be listed. The listing is free; however, many offer upgraded listings or services for the attorney for a price. However, very important for us in our review was the fact that the listing, and in the case of AVVO.com, the rating, is free. So let’s now review all three quality factors offered by AVVO.com in a little more detail.

Ratings: Attorneys are assigned a rating by AVVO.com on a scale of 1-10. Ten being the "Superb" and the highest level. Their web site does not disclose specifically how it calculates the attorney ratings that are assigned but it does indicate career accomplishments by the lawyer such as legal publications, speaking engagements and affiliations with professional organizations are factors in the rating process. The other factor in the ratings that we like, is that AVVO.com tells you if the lawyer has ever had any disciplinary action brought against him or her by a Bar Association. Not only do we think this is important information for consumers, but we applaud AVVO.com as being the only online directory we reviewed that had the guts to post this information. Very big kudos and big khonies. Finally, AVVO.com reports that peer endorsements (see discussion below) do not factor into the rating they assign an attorney. Quite honestly, we have a hard time buying this since we all know about the "good-ol’ boy network in the legal fraternity. I.e, "you say I’m a great lawyer and I’ll say you’re a great lawyer even though were both really worthless piles of cow dung and the public will never be the wiser." Despite our suspicions on this point, we’ll take their word on this point and give them credit for not allowing an attorney to up his or her rating by having all of his or her peers provide glowing endorsements.

Peer & Client Reviews: As mentioned the AVVO.com site allows for clients and peers to review and comment on the lawyers skills and services. Client reviews through out the various attorney profiles we reviewed often appeared forced or fake, maybe we’re just cynical but the fact that the site allows former clients a place to comment on the attorney’s services is a plus. The peer endorsements from other attorneys is a nice feature but we are skeptical about compliments about legal skills published by other attorneys. It’s akin to a conversation among sharks: "Hey your teeth look extra sharp and dangerous today. Why thank you. Your teeth are looking exceptionally vicious as well." Again a few other online attorney locating services allow for these type peer and client reviews and these features are certainly a positive However, within this category we also include reviews and comments made in response to an attorneys participation in the Questions and Answers forum of the web site. When an attorney responds to a posted question it becomes part of the attorney’s profile. The person who submitted the question has an opportunity to review and rate the response and add commentary. By reviewing the attorney’s responses to questions, you are able to glean more insight into the attorney. You can also see if others thought the attorney offered helpful or meaningful information in his or her response. If you’re going to have to hire an attorney, don’t you want one that is going to help fix whatever legal mess you’ve found yourself in? We think being able to access and review the attorneys responses to questions may be more beneficial than the client and peer reviews.

Questions & Answers: As just mentioned besides offering a process to locate an attorney in your area for a specific type legal question or problem and offering a rating service for the attorney, the site also has a very easy functioning Q&A Forum. To use the forum you have to register as a user and establish a password but it is free. Once you’ve done this then just fire away with your legal question. Questions stay open for about a week and you get an e-mail notification when an attorney has responded to your question. It’s free. The site has parameters and warnings about reliance on free legal advice but it also offers tips on how to ask or word questions.

In our opinion, this third feature is what makes AVVO.com the overall best online attorney locating service.

In conclusion if you want to use the internet to help address a legal issue and/or locate an attorney, we recommend AVVO.com. In our opinion it is by far the best and most comprehensive and user friendly online attorney directory on the internet.

Five Important Things to Know About an Insurance Claim in Alabama

[The following material is an excerpt from our recently published Guide for Insurance Claims. Download the entire guide at no charge at: http://www.bfw-lawyers.com/pdfs/Guide-for-Insurance-Claims.pdf]

1. Burden of Proof: The first and most important thing to remember about any insurance claim is that the person or business making the claim (the claimant) carries the burden of proof related to that claim. The person who is handling the claim on behalf of the insurance company (the adjuster) does not have to “disprove” the legitimacy of the claim. The adjusters job is simply to determine if the claimant has presented adequate proof of a covered loss with proper supporting documents or material to pay the benefits being claimed. It is important to understand and realize, the adjuster has an obligation to the insurance company to only pay benefits that are legally owed under the policy. The claim files of adjusters are periodically audited to make sure they are not paying more benefits than required by the terms of the policies and that claims are properly documented before making a payment. In some instances, insurance companies even pay bonuses to adjusters and/or agents based upon claim pay-outs, or more specifically, the lack thereof.

2. Adversarial Process: As nice and friendly as you think the insurance company will be to you in the claims process; understand, Alabama law defines the insurance claim process as an “adversarial proceeding.” This does not necessarily mean the insurance company is going to be mean and nasty to you during the claim process, rather it simply means you have to recognize that your objectives and the insurance company’s objectives are not the same when it comes to an insurance claim. You would prefer they pay the claim and they would prefer not to pay the claim. Because the claim process is defined by law as an adversarial process, insurance companies are granted a certain amount of latitude in how they handle and adjust an insurance claim, even if it works to the detriment of the claimant. Specifically: 1) there is no obligation for an adjuster to “help” you better present your claim, 2) the adjuster does not have any obligation to tell you about critical time lines or time limitations related to your claim, 3) the adjuster does not have to tell you about other possible coverages available to you for the loss, and 4) the adjuster often can not give you advice or suggestions on how to best coordinate multiple coverages related to a loss. Simply put, because it is an adversarial process, you can not expect the insurance company to tell you how to effectively and timely present your claim or provide you with any helpful information . Because this process is considered “adversarial” a claimant does not have a right to justifiably rely on anything an adjuster says about the terms and conditions of the policy and/or the merits of the claim! [See, Apkan v. Farmers Insurance Exchange, Inc. 961 So.2d 865 (Ala. Civ. App. 2007): Insurance adjuster has no duty to help or assist claimant. In fact, adjuster’s duty is to protect the insurance company. Southern Bakeries Inc. v. Knipp, 852 So. 2d 712 (Ala. 2002): If a party owes no legal duty of disclosure to another, then material facts can be suppressed with out recourse for failure to disclose.]

3. No Reliance on Agent’s Oral Representations: As difficult as this is for most of us to believe, Alabama law has held that insurance customers do not have a right to justifiably rely on an oral representation made to them by the agent concerning the terms or conditions of the policy. This means if the agent tells you some event or loss will be a “covered loss” and the policy says it is not, the policy language will control and the loss may not be covered despite what the agent may have said. See Foremost Insurance Company v. Parham, 693 So.2d 409 (Ala.1997).

4. Clauses and Exclusions: Another legal reality that insurance customers have a hard time accepting is that Alabama law considers insurance policies to be “mutual contracts.” See Wolfe v. ALFA, 880 So. 2d 1163, 1169 (Ala Civ App 2003). What this means is our laws consider the customer and the insurance company to be “equals” in the negotiating process. Because of this legal concept (some call it a legal fairy tale) unfavorable and/or sometimes down right unconscionable clauses that work against the claimant are upheld on the basis that the customer got what he or she “bargained for” when “negotiating” for the purchase of the policy. Some of these type detrimental clauses include “commercial” arbitration clauses, forum and venue selection clauses, appeal protocol and procedure clauses, strict compliance clauses, cooperation clauses, indemnity clauses and many more often buried in the fine print of the policy. This also means well crafted exclusions for covered losses can be included, and upheld as valid, under the guise of a “negotiated” contract. One outrageous example of this is an exclusion for property damage losses currently found in some Alabama issued policies. It is an exclusion for “a loss to a covered property caused, or contributed to, by negligent construction.”

5. Notification of Claim: No matter what type of claim is being presented, it is always the responsibility of the insured individual and/or business and/or claimant to properly notify the insurance company of the claim or even the potential claim. All insurance policies have guidelines and procedures for notification of a claim and/or a “covered loss.” If these procedures are not followed, they can provide the insurance company with a legally recognized excuse to not pay the claim. Upon being notified of a claim or of a potential claim, many insurance companies will send out “claim forms” to the claimant. If the company does not provide “claim forms” it would be wise to verify the notice of claim in writing to verify that “timely notice” of the claim has been provided.

Loser Pays: A commentary by Mark Wolfe

The Alabama legislature is considering passing a law that will require the loser in all civil actions to pay the other side's attorney fees. (SB 1 126852-1). I am an attorney who handles civil litigation claims for individuals and small businesses against insurance companies. I am also a small business owner who pays my fair share in taxes and insurance premiums. Maybe to the surprise of many, I have been a proponent of a loser pay concept for many years. We win many more cases than we lose and conceptually many of my clients would benefit from such a law. Such a law would also make it much more economical for many of my clients with smaller claims or cases to pursue the matter through Court if they could recover the attorney fees. For example, day in and day out I have insurance adjusters say something like, "Well yes Mark, the property damage claim is probably really worth $15,000 but your client will have to pay you and the expenses of Court, so we’re only going to offer $9,000." This common occurrence economically forces many insurance claimants to have to settle for less than they truly deserve because the attorney fees and court costs to battle the insurance company will financially eviscerate their victory. For this reason, I think a well conceived loser pay bill could be beneficial for individuals and small businesses in Alabama.

However, the current proposed bill as has too many problems and issues. As the bill is currently written, it will not achieve its desired effect to curtail frivolous lawsuits, but rather I believe it will result in even more litigation and further burden our all ready strained judicial system. However, before addressing why I think that will happen, I want to point out that we already have several laws in place that help prevent frivolous litigation in Alabama. Alabama Rule of Civil Procedure 11 allows for sanctions and the award of attorney fees for pleadings or motions filed without "good ground[s] to support it." Alabama Rule of Civil procedure 37(a)(1)(4) and 37(c) provide an avenue to recover expenses and attorney fees to parties for the opposition’s inappropriate pleadings or motions. Alabama Rule of Civil Procedure 68 allows a party to a civil lawsuit to shift the costs of litigation to the opposing party via a pleading known as an Offer of Judgment. In addition, to help curb frivolous medical malpractice actions we have Ala Code § 6-5-551, which is specifically intended to thwart the filing of an unsubstantiated medical malpractice case. We also have in place various evidentiary laws that make it difficult, if not impossible, to file a frivolous products liability lawsuit. So we do already have in place laws and procedures to prevent frivolous lawsuits. The other thing to keep in mind is that most civil cases end up in Court because there is a legitimate dispute between the parties that requires the assistance of a jury to resolve. In our office it is very rare for us to just "up and file a lawsuit" without at least exploring and discussing a pre-litigation resolution. However, sometimes parties have a differing view of "facts." Or, in a contract dispute matter or a case involving insurance polices, the parties have a differing view of the legal application of sometimes very complex terms to a particular fact situation. (Have you tried to read a copy of any of your insurance policies!) For example, in a homeowner claim, the insurance company may believe the "mold" pre-dated a water leak and therefore they believe the claim is excluded under the "mold exclusion" portion of the policy. The homeowner may believe the mold is a result of a water leak and therefore it should be covered. I.e, a legitimate dispute that may need the help of a jury to resolve. If a case is a "close call" do we really want to penalize the loser? What do you think will happen to our insurance premiums if insurance companies lose too many cases and have to pay attorney fees in all those cases?

The current proposed "Loser Pay" bill as written is too broad and open to way too many subsequent secondary issues that will simply create too many secondary issues which will require protracted litigation. Also, it will lend itself to some very outrageous and unfair results. The current bill reads in part as follows: [I]n all civil actions, the court shall award attorney’s fees as a part of the cost to the prevailing party; and to provide that a prevailing party may bring an action against another party for abuse of process arising in any part on the same facts in the action in which the attorney’s fees were awarded; however, the prevailing party may not recover the same attorney’s fees twice." OK, this sounds and easy on a first read, but let’s look at this closely. What does it mean by "prevailing party?" Are we simply looking at "winning or losing?" (Emphasis added) If so, how are we going to define a win or a loss? I sue a deadbeat Dad for a client for back child support claiming he owes $4,750 in back child support, at the trial he produces a check receipt for a $250.00 payment that my client either didn’t receive or forgot she received. The judge enters an award for my client in the amount of $4,500.00. Who has "prevailed?" If we go by a simple "win or loss" scenario then my client "won." But deadbeat Dad’s attorney will say no he "prevailed" because we did not "win" everything that was claimed. Now we have lawyers fighting over their fees and we all can imagine how litigious that situation may be. An attorney for a landlord goes to an eviction hearing but forgets to bring a properly authenticated lease for admission into evidence at the trial. Case dismissed with leave to re-file. Can the tenet’s attorney now recover attorney fees against the landlord because she "prevailed." What if the tenet’s lawyer was a quasi-government attorney provided free through Legal Services Corporation? A garnishment action is a "civil action." Will companies who are trying to secure a judgment repayment through a garnishment action now have to pay if the subject debtor of the garnishment action is no longer an employee of the garnishee? The dispute scenarios surrounding just the "prevailing party" language in this proposed bill are endless. Every dispute will require further litigation ad nauseam as attorneys argue about who really prevailed in a civil action.

Now let’s look at "attorney’s fees." Note this bill does not say "reasonable attorney’s fees" rather just "attorney’s fees." What if my fee contract for my client on an insurance claim is based upon a contingency fee? We win, should the other side now have to pay the full amount of my contingency fee? I guarantee the first time the insurance company has to pay the other side’s attorney the full amount of the contingency fee they are going to screaming bloody murder. OK., let’s say we agree to a "reasonable attorney fee standard." Now we’re going to have all kinds of disputes as to "what is a reasonable fee" for the legal services provided? If I’m the attorney for the "prevailing party" you darn well know I’m going to be arguing that my fees were reasonable while the attorney for the opponent is going to be screaming that my fees were outrageous and unconscionable! Here we go, more disputes more protracted litigation.

Now let’s add one more layer of complexity to this issue. Let’s suppose we can come to some meaningful and workable concepts regarding "prevailing party" and "attorney’s fees." What happens to the rules and laws mentioned above that we already have in place to stop and prohibit frivolous lawsuits and that already exist to help shift the burden of litigation costs in favor of the prevailing party? If I’m the attorney who has lost and the other side did not utilize or avail themselves of those other rules, I’m now going to be arguing that my client should not to have pay the full measure of the claimed legal fees from the other side because they could have mitigated there fees by using those other rules. More complexities, more issues and more litigation.

Finally, this proposal as written will immediately result in an untold number of lawsuits being filed that may not need to be filed. As mentioned above, in almost all civil matters lawyers try to resolve a matter with the other party before filing a lawsuit. We tell all of our clients, that lawsuits are like surgery, you really don’t want to do it unless it’s absolutely necessary. The simple fact is a fair pre-litigation resolution of a civil matter is in everyone’s best interest. The proposed bill says, "This act shall become effective on the first day of the third month following its passage and approval by the Governor, or its otherwise becoming law." Again, very poorly written and conceived. I assume that it would not apply to those civil cases already pending but only those civil lawsuits filed after the law is enacted. To try and have it apply to those cases already pending would open up all kinds of legal challenges to its validity because it would just not be fair or constitutional, to change the rules "in the middle of the game." So here I am as an attorney with hundreds of claims pending for insurance claimants or businesses that we are trying to resolve without need of litigation and now I’m told this law will be effective three months after enacted. Based upon 24 years of experience I know the vast majority of these matters will resolve without having to file a lawsuit, but now with the "Loser Pay" staring my clients in the face, I’m going to have to move these claims into litigation in advance of the "Loser Pay" deadline. I’m just one attorney, can you imagine the nightmare for our Court system if 10,000 lawyers have to do the same thing. In a three month period, our Courts could be swamped with well over 100,000 lawsuits! The majority of which may never have needed to be filed but for the enactment of this law.

In closing, let me again say, conceptually I am not opposed to a "loser pay" law. Other States have adopted this concept but have taken the time to work through the myriad of secondary issues discussed above. It is clear that the intent of this lawsuit is to stop frivolous lawsuits and that is a good goal. But has anyone asked the Judges in our State Courts if we have a real problem in this State with frivolous lawsuits? I think their answer would be "no" because we already have in place effective rules and regulations to deter the filing of frivolous lawsuits. So if we don’t have a problem with frivolous lawsuits, then why is our legislature in such a rush to pound us with a poorly conceived and unworkable law? Let’s take a deep breath and really think about how we can enact a truly meaningful "Loser Pay" law that does not end up punishing those who need our Courts for the resolution of legitimate dispute.

Mark Wolfe, Advocate for Insurance Claimants

mark@bfw-lawyers.com

Ten Tips for Locating Life Insurance Policies

TEN TIPS FOR LOCATING LIFE INSURANCE POLICIES & BENEFITS
by Mark Wolfe, Attorney at Law and Advocate for Insurance Claimants
mark@bfw-lawyers.com



Locating Additional Policies. It’s a fact, many life insurance benefits go unclaimed because beneficiaries do not realize a policy exists. Below are some tips for locating additional life insurance policies.


1. Review the decedent’s check book or bank statements looking for premium payments to a life insurance company.

2. Review the decedent’s tax returns for the last several years to see if interest or cash dividends from a life insurance policy were listed. There should be a corresponding 1099-INT from the life insurance company. These payments will be reported directly on form 1040, 1040A and 1040EZ or on Schedule B if an itemized tax return was filed.

3. Contact the decedent’s employer and/or former employers to see if any type of life insurance was offered through the company’s group benefit programs and if the decedent purchased a life insurance policy or was provided a life insurance policy through employment.

4. Review all disability policies for the decedent to see if death benefits are also provided.

5. Review any known life insurance policy to see if additional benefits such as double indemnity for accidental death may apply.

6. Check with the decedent’s auto insurance company or homeowner insurance company. Many of these companies will also offer life insurance policies for their customers.

7. Check with the decedent’s bank or financial institutions to see if life insurance benefits or policies were offered in connection with a checking or savings account or in connection with a brokerage account.

8. If the decedent’s death was accidental and in conjunction with travel or a trip, check with the credit card company to see if it offered accidental death benefits for travel or trips paid for with the credit card.

9. Check with any Union, Trade Organization or Professional Association the decedent may have belonged to to see if they offered life insurance benefits to members and if the decedent had purchased a policy through the organization.

10. Use a policy search internet site. There are several internet sites that, for a fee, offer to search for life insurance policies.

Life Insurance Claims: Important Information for Beneficiaries and Claimants

IMPORTANT INFORMATION ABOUT LIFE INSURANCE CLAIMS©
By: Mark Wolfe, Attorney at Law
Mobile, Alabama
mark@bfw-lawyers.com


While most of us hope that a life insurance claim arising from the death of a loved one will be a simple and hassle free process, the fact is many life insurance claims are initially denied. These denials can be for many reasons. Some times the reasons for such a denial are legitimate, but many times they are wrong. In fact many insurance industry experts say that up to 40% of life insurance claim denials are done so wrongly.

This article will help you with some basic information about life insurance claims and locating policies. Then the article reviews common reasons why life insurance claims are initially denied and concludes with important information for claimants if the claim is denied.

I. LIFE INSURANCE CLAIMS & LOCATING OTHER POLICIES

Notify the Company of the Claim. While this is a very basic step it can be a little difficult if the policy is older. Mergers and acquisitions of life insurance companies can make locating the correct successor or remainder company a little difficult. However, internet searches can usually help you quickly identify the correct company name and location for claim notification. Also, many life insurance agents or attorneys who handle life insurance claims have this information available or access to the correct resources to help identify where and how the claim should be submitted.

What You Need to Do. Once you’ve contacted the company you must complete the claim form. Many of these claim forms can now be downloaded from the company’s web site. At the very least you will have to submit a copy of the death certificate and the company may require additional records related to the claim. Always reference the claim number or policy number (or both) on all documents or material submitted. Until the claim is paid in full: Keep copies of all correspondence and documents sent to the life insurance company. Keep all letters and material sent from the life insurance company. If a claim is denied, make sure you understand and comply with the requirements for an appeal. (IMPORTANT: Please make sure to read more about appealing a denial below.) Why are so many life insurance claims denied? Most life insurance claims adjusters recognize that many life insurance claimants do not question or challenge a denial of life insurance benefits. This means that if there is a “close call” on whether or not benefits should be paid, they automatically opt for denial first in hopes the claimants will just “go away.”

Locating Additional Policies. It’s a fact, many life insurance benefits go unclaimed because beneficiaries do not realize a policy exists. Below are some tips for locating additional life insurance policies.

1. Review the decedent’s check book or bank statements looking for premium payments,

2. Review the decedent’s tax returns for the last several years to see if interest or cash dividends from a life insurance policy were listed. There should be a corresponding 1099-INT from the life insurance company. These payments will be reported directly on form 1040, 1040A and 1040EZ or on Schedule B if an itemized tax return was filed,

3. Contact the decedent’s employer and/or former employers to see if any type of life insurance was offered through the company’s benefit plan program and if the decedent purchased a life insurance policy or was provided a life insurance policy through employment,

4. Review all disability policies for the decedent to see if death benefits are also provided,

5. Review any known life insurance policy to see if additional benefits such as double indemnity for accidental death may apply.

6. Check with the decedent’s auto insurance company or homeowner insurance company. Many of these companies will also offer life insurance policies for their customers.


II. DENIAL OF BENEFITS AND APPEALS

Standard life insurance claim denials. Many times if a basic life insurance claim is denied, it is done so based upon a process known as “retroactive underwriting.” This is a claim investigation technique that allows the insurance company to more fully and completely examine the deceased’s prior medical history. These prior medical records are reviewed thoroughly to see if the deceased left out or failed to disclose a pre-existing medical condition when completing the life insurance application. This “failure to disclose” is then used as grounds to deny the life insurance benefits. However, most claimants are not aware that such a denial must have materially effected the underwriting risk associated with issuing the policy. Simply put, the company must be able to legitimately argue that “but for” the undisclosed prior medical condition, the policy would not have been issued or the rates for the policy would have been significantly different. The issue of “material risk” is a complex issue that is often legally debatable.

Accidental death or double indemnity benefits. Some companies issue stand alone accidental death life insurance policies or some standard life insurance policies have a “double indemnity clause” which pays twice the face value of the policy if the death is caused by an accident. Yet the policy language concerning the term “accidental death” is often drafted so vaguely that it gives the company lots of “wiggle” room to initially deny accidental death benefits. Terms like “sole and only proximate cause of death”often involve complex medical and legal analysis but give the company a very legalistic sounding excuse not to pay.


BEFORE YOU FILE AN APPEAL OF A DENIAL. If you have questions about the denial of any life insurance benefits, make sure you fully understand your rights and obligations under the policy. Most life insurance policies allow claimants to file an appeal of the decision to deny benefits. Yet many times claimants are unaware of the potential consequences of simply “appealing” the denial. Generally, once a company has denied the life insurance claim, the claimant has the burden of identifying specific reasons for the appeal and providing supporting documents or records to support the appeal. If the life insurance policy in question has been provided through the decedent’s employment or through a group, the failure to comply with the appeal requirements can be extremely detrimental. In one recent example a Federal Court determined that the claimant’s failure to submit any “new evidence” during the appeal process provided for in the plan, precluded the claimant from presenting that new evidence at trial. [See Hancock v. MetLife, 590 F.3d 1141 (10th Circuit 2009).]

NOTE: If the claim is denied consider consulting immediately with an experienced life insurance claims attorney in your State. Note: Most attorneys who handle life insurance claims for beneficiaries do not charge for a consultation and work on a contingency fee (no benefits = no fees). Also, many times an experienced attorney can help resolve a denied claim before having to resort to filing a lawsuit.


III. CONCLUSION

While life insurance claims should be simple and easy, they can often times become arduous and legally complex. The simple fact is insurance companies do not like to pay claims and have tremendous resources to fight claims. With many claimants of life insurance benefits in a state of grief and mourning, the insurance company knows it has the upper hand and this often results in the wrongful denial of life insurance benefits. If you believe your claim for life insurance benefits has been wrongfully denied, please consider consulting with an experienced attorney who knows and understands this area of the law.

Note from the author: If you are reviewing this publication or link during a time of loss, please accept my condolences and sympathy for your loss. I pray that you find comfort and understanding for your loss and that the passage of time will replace the sorrow of your loss with the joy and blessing of the memories of moments shared. - Mark