Louisiana Insurance Commissioner Jim Donelon last week filed a restraining order against a Houston law firm, accusing it of fraud in connection with hundreds of hurricane-related lawsuits in his state.
“The scale and scope of illegal insurance at McClenny, Moseley & Associates is like nothing I’ve ever seen,” Donelon said in a press release. “It is difficult for the department to issue regulations to regulate entities that we do not regulate, but in this case, this rule is necessary to protect policyholders from fraudulent insurance companies.”
According to Donelon, the law enforcement agency filed more than 1,500 cases in Louisiana over a three-month period last year.
Louisiana’s property insurance market has been shrinking since the state was hit by hurricanes in 2020 and 2021, with 11 homeowner insurers in Louisiana declared insolvent between July 2021 and September 2022. The insurers paid out more than $23 billion. for insured losses from more than 800,000 claims issued in two years of hurricane force. The largest property loss events were Hurricane Laura (2020) and Hurricane Ida (2021).
In addition to driving insurance policies, the growing damage has caused a dozen insurers to leave the market and more than 50 to stop writing new business in parishes affected by the hurricane.
Louisiana’s problems are similar to those of another coastal state, Florida, but there are significant differences. Florida’s problems are rooted in decades of legal brutality and fraud, while Louisiana’s has had more to do with insurers running out of money and not having enough insurance to handle claims in 2020 and 2021. , Louisiana insurers have not faced many lawsuits. which Florida insurers have experienced.
“Now it appears that some attorneys are trying to take a leaf out of Florida’s book by being aggressive with Louisiana property insurers,” said Triple-I Director of Corporate Communications Mark Friedlander. “We commend Commissioner Donelon for quickly putting an end to this fraud.”
According to the reports of Times Picayune / New Orleans Advocate, an investigation by the Louisiana Department of Insurance found that the Houston company engaged in insurance fraud and unfair business practices through Alabama-based Apex Roofing and Restoration and has faced possible criminal charges in courts across the state. In one such case, the newspaper said, a woman testified that she did not want to retain a law firm when she hired a roofing company to repair her roof that was damaged in a hurricane.
The newspaper said: “The company told his insurance company that it was the one representing him and charged him, even though he said he didn’t know.
Regulatory pressure is a major problem that is driving insurance rates higher across the country, and more expensive, because of the importance of insurance to development and commerce. Triple-I is committed to informing the discussion of this critical issue.
Learn more:
Hurricane Drives Louisiana Insurance Losses, Uninsured
Florida’s Growing Insurance Crisis Changes and Recent Opinions
Florida Auto Legislation, on Heels of 2022 Reforms, Suggests State’s Need for Insurance Crisis Fix
Florida And Legal System Abuse Featured at JIF 2022
IRC Study: People’s Perceived Impact of Lawsuits on Auto Insurance Claims
A Step-by-Step Approach to Financial Transparency