Comments are important in the Blogoshpere. What I may or may not write is relevant only if it is important to others. If some wish to comment with views from which we can all learn, progress is made. Sometimes, we do not read the comments to blogs which may be insightful and provide some food for thought. For this reason, I am posting some of those comments which in my opinion provide more provocative thoughts for your review and comment:

In a reply to a comment from a recent post I wrote:

"When reading the post in Slabbed, I felt Slabbed may be "jumping the gun" with Scot Spragins’ character. That was my point.

I also know Scot personally from our work against each other in the Katrina matters. Like gunslingers, I expect him to try to beat me fairly, squarely, and by the rules. I enjoy the competition. I do not shy away from that aspect of litigation. It is fun, and I enjoy the study of good trial and litigation techniques.

I hate those that "cheat" in my line of work. It makes the entire process of justice break down when attorneys allow "cheaters" to win. It is a problem with discovery in many Courts, and the judges simply have to allow a more transparent and complete production by defense counsel. Delay and deny information is the technique of the day by insurance counsel because judges are allowing it to go on. We, the Policyholder’s Bar, have to do a better job of persuading judges that more complete and faster justice will occur if they will stop being duped into limiting important discovery. Slabbed made a good implicit point on this as well.

I have never found Scot to be the way he was portrayed in the allegations, and I was surprised and saddened by those allegations of his alleged involvement.

From experience, I am not surprised that State Farm has been accused of trying to "pressure" its appraiser. I feel sorry for State Farm’s customer, not State Farm."

One agenda of my blog is to provide an honest opinion of what is going on in the insurance coverage and claims field. I could "dump" on insurance companies to gain business, but that would be a false statement about the truth. Such propaganda would just placate those that want to say that insurance companies are bad. In my view, one of the major problems in our modern culture is not giving credit to those with different opinions just because you do not have the same view. We need to have more mature debate as well as transparency about the "elephants in the room" without fear of reprisal.

Slabbed is a great blog. Read it and think. Once in awhile I might think they have gone overboard, but their view is a little different than mine. By reading it, however, you will learn a great deal.

Bruce Smith is an expert we retain on business interruption matters and he is taking me on for debate in a recent comment to a post regarding State Farm. He said:

"First of all a disclosure, in my forensic accounting practice, I have been engaged by both State Farm and policyholders/public adjusters/plaintiff attorneys, to analyze business income and stock loss claims.

Ok……….let’s look at the facts on the ground. I have been working with the insurance industry since 1990. Over the years, the number of "legitimate" property carriers in Florida has decreased from a strong group of national insurers to being able to write all of them down on a small post-it notepad.

Now, as it seems, State Farm will be leaving Florida due to a disagreement on the "facts". Both "sides" have their arguments and I’m sure both sides are mixing some truth and some fiction in their respective positions. However, the bottom line is this, Florida is losing one of its last "legitimate" insurers, and what will remain are a group of new, untested insurers that, although I do not own a crystal ball, will likely end up in receivership after the first major or maybe "semi-major" disaster that WILL be coming our way.

Just let the free market work and if State Farm does not provide VALUE to the policyholder…guess what… the potential policyholder will look elsewhere for it coverage…"

 I wrote back:


We need more good insurance companies. We do not need those that fail the public trust–no matter what the cost.

What do you mean a "free market?" Do you mean similar to the financial "free market" that made the credit default swaps? I want no part of a "free market" like that.

Historically, there is antitrust exemption contained in the 1945 McCarran Ferguson Act, which placed responsibility for insurance regulation with the States. Thus, insurers are permitted to engage in certain joint data collection, price trending, and form and policy development activities. That law makes possible rating organizations such as the Insurance Services Office, the National Council on Compensation Insurance and the American Association of Insurance Services where information can be shared among competitors.

Do you want a free market where competitors can price fix and engage in monopolistic practices? I assume not, but that was the "free market" in the late 19th Century.

I know you went to the same economics classes I went to. Where anti-trust laws do not apply, the consumer, in the long run, does not get the best price in a free market because the market can collude to price fix.

Since the insurance industry bargained for the state regulation of rates in return for exemptions of the anti-trust regulations, it is absurd to know say that this is a "free market" initiative or a bad deal for the insurance industry. They bargained for it.

This proposed law is all about State Farm getting to have its cake and eat it too."

He replied: 

"My comment on free market was meant to connote the government letting a business decide what it chooses to charge for its goods or services, not government mandating what they believe is the value of those goods and services and subsequently instructing what the company can charge. Is there a possibility of abuse by the company (price fixing…)? Yes, as you suggested, there is a potential for that to happen.

Now let’s now get to the facts on the ground….and the $$ affect on the Florida policyholders. When I started my forensic accounting business in 1992, there were numerous large property and casualty insurers in Florida. Now there are few and soon to be fewer.

Chip, please explain why have so many large insurers left the State of Florida? I’d like to hear your opinion and then I’ll reply with mine."

I will have a correct explanation to his question and put this to rest, but weekends are for relaxing. I am in no mood to think about the economics of insurance markets when the much more important NFL Draft has my full analytical attention.

Regarding Overhead and Profit, I am going to soon devote a full post to this comment and question:

"The insurance carriers do not pay O&P on roof replacement when a general contractor is not involved stating it is because there is only one trade involved.

Where did that come from and is it true that when the insurance co. calculates the premiums that they account for O&P in that calculation?"

For those who want 90% of the right answer, our website has the following paper I wrote on the topic a long time ago, Withholding Overhead and Profit is Wrong if Insurance Companies are Trying to Act Right.

Finally, my first legal assistant I hired in 1985 when I left Butler Pappas, with nothing, wrote in response to my post, A Few (four, and there are more) Suggestions From One In the Muck of 2009 Insurance Claims and Controversies:

"Wow, Mr. Merlin, you sure work hard.

Sure has paid off though. :)


She sure knows how to bring me back home and appreciate where I am from. It is an important lesson. All comments and thoughts can be important if we just do not close our minds. In response, I wrote:

"You got me. I was wrongly feeling sorry for myself after a long day.

Thanks for calling me on it."

I appreciate you reading through all this. We can all learn from sharing ideas and thoughts. While I study and practice in this field for a living, I hope you will share your ideas and call me on those when you feel I am wrong. We all learn when we are not afraid to express ideas.