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this is very important this panel here because there are when there's a what is a dispute insurance companies are really they're regulated by really three potential elected officials or appointed officials in each state if there's a civil dispute or a criminal dispute it's a judge terms companies are also regulated by Insurance Commissioners in each state and they're also yet by the Attorney General's we've talked about that and we went we thought that this would be very very important especially after this debate for you to hear from them to hear from each of those bodies so we went around we thought who would be the good who would be the best that we could find to give you the interests a lot of the things that you're facing now are a result a lot of the insurance companies methods that they're using now a lot of those changed after Katrina because it was such a massive storm a lot of things changed there was a lot of new law there's a lot of things that happened there and so we want to take you knows you know the Katrina hit Mississippi and Louisiana so we did is we picked a judge an appellate judge and I'd like to I'd like to call the judge up first judge judge Tiffany chase judge judge Chase is an appellate court judge judge chase was actually working with the Supreme Court when Katrina happened and then she became a judge that handled civil matters in court after Katrina now she's an appellate court judge and she oversees we wanted a a judge that it's civil experience but also that had criminal experience so we thank you judge Chase for being here I also like to bring up arrant we an Insurance Commissioner so ii won't we have the second longest-serving insurance commissioner in the united states jim Donnellan and i will tell you that these two had had issues with their plane because of the weather and they both got in at midnight to be here even because their flights were canceled they get it at midnight and and and and commissioner Donnellan actually had to fly to Los Angeles and drive all the way to be here so it's quite it's quite an honor to have you and the next next panelists very very proud that he is here because he was the first Attorney General to prosecute an insurance company for fraud Attorney General Jim hood thank you thank you and if I could say a little more you know Jim Donnellan normally insurance commissioners I tell you they go in and out of the insurance industry right and the insurance industry is really there so they have to have to have you here is is really really special a few uh about a month ago he helped introduce the and was there during our press conference the American policy order Association tell you a little story about Katrina when Katrina hit when Katrina hit there was a it took a long time to get back and Louisiana has a very very short statute of limitations very very short and it was running out and to tell you how much respect the insurance industry has for commissioner Donnelly Commissioner Donovan went on behalf of the states to all the insurance companies in Katrina and he got them all to voluntarily with billions tens of billions of dollars at stake voluntarily extend the statute of limitations for homeowners and that that gives you an indication so he was also you were the president of the National Association for Insurance Commissioners thank you so we convened the panel because we would like we'd like to hear from you about issues of insurance fraud things that you have seen we we all talk about and we talk about insurance fraud we normally always associate it people always associated with the homeowner or a contractor coming fraud against the insurance company as we know most that mean that happens but there's also a lot of fraud the other way and so very very happy that you're here because I want we want your perspective for the contractors about what you have seen and we also want to ask you things about what can be done and what you think in the future to curb this type of criminal conduct you know doing this civilly for a long time and I've been doing this now for more than two decades and and what I see is there's bad conduct and the plaintiff lawyers you know they take the cases and they sue in civil court and then they if they win and the worst conduct if they catch them with really bad conduct the insurance company the worst that could happen generally is they give the money back maybe a little bit of attorneys fees but as you met as you know only 1% are suing so what we're looking we're looking at is the worst conduct we understand that there's reasonable disagreements about things and we're not talking about that conduct we're talking about instances where there was actual criminal fraud on behalf of the insurance companies so if you could could each give us some of your experience and what you see what you've seen through Katrina whether you've seen it getting better worse in the courts and and the conduct and just generally your experience that you've seen I would say that it's very difficult as far as a judge is concerned because everyone's always on their best behavior when they're in in the court but it's really incumbent upon the court when they start to see things from the lawyer's point of view that there's something that's just not right a lot of times the adjusters or members of the insurance company may come to court they may sit in court to kind of watch the proceedings to see what's going on a lot of the cases from Mississippi as well as from some of the federal courts have really shown judges interactive behavior in seeing that there's something just not right and calling the insurance companies to the table and saying why did you do this why do we have two separate reports this just is not right and in those types of situations I think that the case management orders that trial judges give out to to the parties are very important in that they can get the information from the insurance companies and as far as litigation in Louisiana we do have some penalties that can be imposed but those again are civil penalties and the reality of it is if you're gonna get hit with some money I don't really think that that is the impetus to make someone do something right it's criminal penalties if you know that you're going to jail yep and we were talking about after Katrina with with hours with citizens and some of the people that went to jail those are serious implications no one really cares about the fees and and cares about the money so the civil side of it really does does nothing but you know what these gentlemen have done really trying to make sure that the courts see exactly what's going on because as judges all we can do is rule on what's before us we really don't have the ability to actually go out and be the investigatory arm which is what you guys did so kudos to you thank you and John thank you for having me it's indeed an honor and a privilege to participate in this robust discussion of things that I see here weigh the pros and cons of every day in my job as regulator of insurance and the first responsibilities Duty I have is to protect consumers and of course the first step of that is to make sure there that the insurers are meeting the solvency requirements the law requires what I just said is echoed by all of my colleagues all over America every time I'm in a national meeting consumers are our responsibility and the first step of that is to make sure they have the money to make good on the promises they made when they collected the premiums but it goes beyond that I tell folks all over my state that we're the better government the Better Business Bureau for insurance issues in our state if you have a complaint bring it to us if you put it put it in writing we'll give you their answer in writing that's how we operate if you just give us a tip you don't get the benefit of that explanation from the other side but you do get our best effort to investigate and and pursue the license the referral to law enforcement whatever is appropriate when we have a valid complaint filed and as to fraud specifically for decades now we in Louisiana have had an assessment on the books that frankly expires June 30th the end of our fiscal year this year so in this session there'll be a bill introduced to reauthorize that that assessment on all insurers life health property and casualty all insurers doing business in our state to fund a fraud unit which is a partnership of the attorney general's office state police and our investigative Fraud investigative unit only six seven employees strong but we provide the insurance expertise to that unit there are two dozen state policemen funded with with with that assessment and several employees of our attorney general's office but in addition to that I have always had a experienced criminal law attorney on contract and when I here have valid information brought to me of potential fraud on the behalf of a lawyer an insurance company an adjuster a contractor whatever any time I get such information it's sent off to law enforcement and this good reason for that in my state you probably you John know maybe most of you do not that in the past in Louisiana we've had three consecutive Insurance Commissioners end up in federal prison I don't want to do that I want to go home when I retire from from my present position and there's such a thing in federal law as misprision of a felony if I know of federal law being broken and do not refer it to law enforcement then that's on me and and I don't take that very lightly I indeed am very very aggressive in vetting with that attorney on my staff and then passing on in a confidential manner valid information brought to our attention it really is a very useful tool and I totally agree with the priests you and your your colleague in the previous panel the fact that there is good and bad everywhere in politics in in the media in insurance and in the the legal profession and our job as regulators of insurance is to play that referee much like the judge but ours is regulator not decider of of disagreements ours is to regulate this very very complex expensive and vital part of our nation's economy and the lives of policyholders all over America we take that very seriously and again I appreciate the opportunity to be here and discuss these issues with with you it's missioner one on one question I think it's it's important to understand because in some states not just Louisiana but in other states some of the policy premium money that is paid to the insurance companies go back two to two units and it's in the Insurance Commissioner's Office is that right oh yeah my my office that I took office twelve years ago I had a 30 million dollar budget and 275 employees today we do more with 225 employees in 12 years later 31 million than we were doing when I took office at first year we've been through Katrina we've been through the Affordable Care Act and all the challenges of that we have every aspect of insurance with with daily issues relative to rate with one of 17 states that have prior Authority rate review authority over property and casualty policies in our state that's an awesome responsibility we have six actuaries Foton on our staff that work in that area but yes we are fully paid and funded by not just the insurance companies but agents adjusters public adjusters all of the folks we regulate pay a fee or an assessment or a license fee to fund the operation of our office see one of the things I know we have we have talked about this we've talked about this before but one of the concerns of policyholders who may be the victim of insurance for a courier fraud on the carrier front side is that they their concern is in some some not yours but instability but in some Insurance Commissioners offices that the insurance commissioners are generally sometimes it's a revolving door where their ex their ex executives insurance companies or they go back to being executive executives insurance companies and one of the concerns is is that not enough fraud is being prosecuted against against carriers who commit fraud because the money that are funding the Insurance Commissioners offices may be coming from that so my question is what are your thoughts in the future if we if we were going to look at that issue of how some improvements that we could potentially make to be able to have to put where the funding that's being provided could could come maybe from elsewhere maybe it's maybe it's from nonprofits like the American policy or Association certainly we'd be happy to look at that frankly I I don't see that as a problem it never ever enters our thought process I've never heard it even discussed whether or not we would be lenient on an insurance company because we assess them or or charge them for for regulation of themselves there are other concerns the revolving door that you alluded to much more prevalent in the appointed commissioner arena and in the 12 states explain collies explain that difference only because that's important for you guys to know very important in some states the Insurance Commissioner gets appointed in other states they're elected by the public and there's a thought process as if you're elected by the public irresponsible to the public that if the public is reaching out and you're in and that insurance commissioners are doing a good job that they could vote in a new one there's other things there only that all of us who are elected you mentioned when you brought me out that I'm the second largest longest serving in days I am we think you're doing a good job and I'm elected the longest serving is from Washington State the other side of the political aisle from myself but a good friend and colleague he's been certainly he's been in office a couple years longer than I have the third longest serving is from my neighbor next door Mississippi Mike Chaney he's a year behind me and that is significant because us electeds tend to stay around much longer than our colleagues who are appointed generally as cabinet members of their governor's office they turn over every two two and a half to three years it's really detrimental yes to continuing a consistency and regulation and it does lend itself to the criticism of the revolving door you are the regulator for a while and then you go into a next career of of being part of the industry yeah and I think so if you where you are working you need to know this stuff you need to look up who is your Insurance Commissioner who who is it he or she is she appointed is she elected this is very very important for you to know to understand and start getting involved if you have complaints to start sending them to to the Insurance Commissioner and this is one Avenue the other Avenue of being able to bring complaints we've talked about it before but you know in yeah and that brings me to the Attorney General in Hurricane Katrina I was actually working with I was appointed to do some amicus briefs after Katrina by our Attorney General in Louisiana we started to see actually because of what attorney general hood was doing in Mississippi many of you may may have heard about the Rigsby sisters the whistleblowers that came forward in Mississippi and they were changing reports a engineering report engineer would go out to a property they would write an engineering report that engineering report will go to a home office and that report would get reversed or changed and general hood he looked at that situation and he said that's crimped that's criminal insurance fraud and he started something and and you know what once you tell us about your your experience because what general what you have done and what you were able to do as being a leading force of course as you may know was paralleled in Hurricane sandy by a by the Attorney General in hurricane sandy tell us a little bit about what your experience and stuff that stuff was that way and how you handled it John it's an honor to be here I have a flight so I had to leave at 12:00 so if I skip out that's that's why I'm but you know I I was elected Attorney General in 2003 and I tried the Mississippi Burning case in 2005 in that summer and the guy was sentenced in early August and Katrina he had August 29th of 2005 within days I started you know recei ing calls that insurance companies were paying zero on slabs and I said surely they wouldn't do that and I've said it's so many more times since I've been Attorney General these 16 years that you know whether it be an insurance company doing something or a pharmaceutical company or BP or Google or me though the battles that I've had with these companies I'd go surely they wouldn't do that and then once we started looking into what that while they were denying these claims there was about seven cases after Camille hit in 1969 in Mississippi in Louisiana and there were seven cases in Mississippi and our law was crystal clear what the burden of proof was on the insurance companies and the insurance so we began to start looking at whether they actually following what our Supreme Court has said the law was in our state and and we found that they hadn't and it wasn't long until we started hearing about these engineers that were brought into the state and if they didn't do what they were told to do then they would get fired and then there was these whistleblowers there's two two sisters who work for State Farm and but actually it was a Rimkus I think was a company it was a subcontractor deal but they had seen some files and one in particularly that I remember because I mean all this litigation in years of battles that I've been through you know it's kind of wiped my memory of a lot of these things but one thing that stands out was they got a copy of a file that had a sticker on it it said don't talk about this file don't pay this don't discuss this and in that file was one of those situations where they had forced an engineer to reverse their position on it on whether it was wind or water as the cause so we started from that point we began a grand jury investigation and we had people come testify of course the insurance companies blocked up and protection of all their employees as well as a joint defense agreement with the independent contractors that they had they built a Chinese wall that they thought that it was impenetrable the the private lawyers out there that when litigation continued to provide us with documents and an information we filed a suit finally we got State Farm and several of the other companies to go back and reevaluate claims you know my goal was to get people pay you try to make them hold as best we could rather than send somebody to jail now in hindsight you know that would have probably been been the best thing for us to have done because it happened again in Sandy it's the same engineers that were left Mississippi and they went up there they hired him knowing full well that they had been involved in fraud in Mississippi because in the interim there was a whistleblower suit filed by these sisters and in federal court if you if you if you note observe something that is theft from the United States government then you can file a suit and you get a percentage back it's an incentive to people contractors or whomever who seed fraud out there to report it so these sisters filed a suit and it went on for years but finally a jury in federal court in Jackson Mississippi found the State Farm committed fraud literally committed fraud in providing false engineering reports they then then the Fifth Circuit upheld that and ordered the insurance companies to provide additional five hundred files so that's continuing to go forward then I realized that we the federal government gave the state money it was homeowners assistant assistant plan whereby we provided grant money so we have actually gone back and ensued several of the insurance companies now for defrauding that program that state program with federal money so there's a lot of litigation still continuing here you know some 14 years later but what happened up it was sandy I thought surely they wouldn't do it again not after all they've been through Mississippi found to be have committed fraud by a court upheld by the Fifth Circuit and and and they did and just a couple of days ago there was a case that came down in the Eastern District Federal District Court in New York and the court found that some of the same actors had committed the same kind of fraud so my point to you and being here is that it's what John's brought to my attention is that and Eric Schneiderman when he was a in general in New York is that we don't really make cases if somebody doesn't report them to us you know we have all this technology I got a cyber crime unit you know we do catch a lot of people doing things with technology but usually as someone reporting something to us and so it's vital when I think you go into in a disaster situation that that you report things that you're seeing out there to the Attorney General's Office and the way to do that is to go there beforehand go there before there is an event get the consumer protection if you get the AG in a meeting great but the AG's gonna it's going to go in one ear and out the other and when there's a storm they might remember it but those consumer protection people are the ones who you need to be talking to exchanging numbers and things like that so that you can make that contact and I just wished that we had something like that APA back when I was having to deal with this during Katrina that we could have could have had a data base could have had a list of kind of engineers who have found to have committed fraud in the past that they could have come handed us and I think by forming this think by forming this organization it will continue you know AG's come and go in Louisiana you've had you know we've had three since I started as AG and and so AG's come and go but the Consumer Protection offices they stay there but this organization that y'all is set up and and and John I applaud you on getting this started it will continue it will continue to have that communications with attorneys general offices and we will prosecute fraud if somebody you know comes in and shows us to engineering reports and then some type lie this mail fraud you have so many charges as you can bring if they send it over the over the internet if they emailed it those kind of things and so we are glad to prosecute these kind of cases if you little operate so I appreciate the opportunity to speak with you and if you all have questions before I have to zip out of here toy then I'll be glad to try to I appreciate attorney general and I know I've said this before at a different panel but you know we all stand on each other's shoulders right work that was done by probably some of it's our parents and our grandparents and other things we stand on each other's shoulders and in the industry that's happening too and I can tell you Attorney General the things that you did in Katrina the things that you did there it reopened in Sandy because Eric Schneiderman what happened for those of you who don't know you know we had the whole statistics after sandy but in that in that case my law firm we funded about 80 percent to the initial litigation that was filed in that in in that in that storm and in that case we found I saw the same guys you know the same guys that were there at Mississippi same guys that were in New Orleans that they were at public allegations of fraud and here they are in Sandy but the thing was a civil litigation was so expensive in New York we started losing money I know yeah at one point we were calculating I was losing seven to eight hundred thousand dollars a month personally in that litigation and it didn't seem to be an end in sight and at one point you know we kept going back to the bank and Julie and I just my wife and I had just gotten married and we were at a point we kept going we went back to the bank and back to the bank again and back to the bank again and it looked like we couldn't go back anymore and we were actually facing I was facing losing my house too with my my clients and there was a point where I thought I would and then it just I remember one night I had actually spent half a night in the closet I was so upset and I thought I don't want to wake my wife and I was so upset and it just came to me and I thought wait a second the all this litigation wait this is fraud it's the same guys what general hood did that's what I'll do and and because of you because of the things that you did it was an idea we went to Eric Schneiderman we showed him the fraud and you guys may have seen pictures have you been to the a pa booth what happened guy in handcuffs and and that changed that reopened so that this that what you did led to the reopening of a hundred and forty-four thousand claims as a one hundred forty four thousand families had the opportunity to reopen their claims because of the things that you did Attorney General wow wow hey can we get a question and and I and I and I'll tell you I'll tell say also that that was also part of the impetus with the APA so those who you aren't members now you should be before you leave here that that by being a member of that look you're you're busy doing your work you're busy putting the roofs on you build rebuilding you're busy adjusting you're busy litigating a civil case you don't have a lot of times these things aren't reported because we can't afford to do it where we're trying to just in a lot of times we get our money and we go on we don't worry about that but what you're able to do now if you suspect fraud and you remember the APA is tell them that you know we remember the APA and the APA speaks to every Attorney General in the country so because of you this idea was also born and I thank you Attorney General but thank thank you John for your on we have a couple of questions since you're you may be leaving soon we've got a couple questions we've got a couple questions right over here the whole panel attorney general hood I'm actually a contractor in Mississippi and I appreciate all the hard work you're doing with us and holding the insurance companies accountable one of one of the things that I'm also involved in is real estate and one of the moves that's happened in our laws right now is that we're making it illegal for third party liability lawsuits on for land land landlords so I couldn't think of it in other words tenants can't sue me because someone does a drive-by on the neighbor's house and someone gets shot whereas right now they can even though it's a frivolous lawsuit it's still a lot of money and attorney fees and all that good jazz that goes through and that's why these lawsuits come to play one of the biggest problems that I think drive down insurance are prices and an Xactimate from Mississippi which by the way we are the lowest in the country I've been 10 weeks in Denver this year it's been six weeks or eight weeks in a North Carolina this year we're almost half according to Xactimate of what an a roof would cost so these tactics of driving down prices like not letting contractors speak on the policies and and enter and pursuing laws like that would that be circumvented if insurance companies were allowed to work and almost encourage to work with us more maybe not be allowed a su an insurance company for recommending a contractor that meets all the legal requirements and and and and and maybe maybe you know not being able to do that would would open up the doors for insurance companies to work with us and have actual preferred vendor programs that actually do something rather than go in with managed repair programs that have that obviously drive down prices so is there a way that that is that on the table first of all in Mississippi and is that something that you think would make a difference they don't have a lot of incentive to work with with you and I know a lot of you want to work work with them and get things accomplished and move on and stop all the bickering your finger-pointing but they're making so much money take it it's 2005 a Jim you may have these more updated figures than I did but I just looked through some notes and the insurance industry could have paid all of the claims in Katrina just from the premiums that they had and in fact that year they had 18 percent profits plus they increase their reserves to four hundred seventy two billion dollars by seven percent that year so they're making money and unless somebody upsets apple cart there's no incentive I don't think for them to come to the table maybe Commissioner Donnelly has some suggestions that can better answer your question but you know I think that what they understand is that all this litigation that's just a cost of doing business for them the thing is is is like in Katrina they were dumping cost off on the taxpayers is what they were doing the taxpayers through the flood program and and so they will continue to do that as long as we allow them to do so but maybe Commissioner Donnelly can better in you're questioning some suggestions well I I did hear the allegations and we didn't have the slab cases that y'all did the coast of Mississippi was wiped barren in our case we had levees break and so we had a watermark when the water rose from from the broken levees we could tell that below six feet was water flood damage and not covered by the homeowners and the wind did anything above that in many cases what some of it was both we did have allegations of shifting to the to the federal Flood program from the homeowners side but I was telling the judge just in the back beforehand I had a colleague a legislator who was complaining about his flood adjuster and said that it was being shifted over to buy the single adjuster to the homeowners policy and he wasn't being paid what he was entitled to on the flood side there's there's certainly lots of room for improvement in there's bad actors in every profession I mentioned that earlier but I was in the gym on a Sunday evening on an elliptical machine when the fellow next to me said you're the commissioner you might want to watch this and it was the superstorm sandy expose coming out on on 60 minutes and like you mentioned earlier general I was incredulous as to why that engineer who happened to be from my hometown in Metairie but I had never heard of him before watching that that expose what would his motivation be to defraud policyholders like that and in addition to that what would the motivation be for the federal government to do that to their policyholders I just was disbelieving but frankly there were motivations obviously at work and in the the work that that was done in Mississippi and in in New York and New Jersey ended up benefiting hundreds of thousands of policyholders as they got their their claims readjusted but but as to the the question what can be done to better community between those with with a legitimate claim and a need for assistance and the the companies that is what we're there to do if they're not communicating that's against the law bring it to us through a complaint and we'll take it from there as the Better Business Bureau does with air-conditioning Repair me so I think one before you go Attorney General and I think I'd like to ask the judge this in particular and then attorney general I think you could also weigh in here for both of you of course commissioner if you weigh it on it but people are they there's a distinction between civil proof and proof of criminal proof and there's different levels of that and then there's also people are confused as to what the definition what would be the definition of criminal fraud in general and I know we can't give people legal advice but in general what is it and what do you have to prove well I'll tell you this in a very simplistic way fraud is doing what you know you ain't supposed to do though and it happens a lot in its intentional acts that are done upon a lot of the policy holders in these cases and fraud you know you have civil fraud and so you just kind of have to show a little bit but if it's criminal fraud you just think about the fact that you're going to be incarcerated and it goes back to what we were talking about you know maybe in hindsight is always 20/20 but you know if those people would have gone to jail they wouldn't have done it yep it's a billion-dollar industry they're making money hand over fist it's the cost of litigation they're trying to continue to come to court they're paying their lawyers they're paying the ame experts and one of the things that I was glad that the judges did in their opinions was actually name these people you don't have to call people out because as a judge if I'm reading a an opinion that lists this particular adjuster or this particular part so I'm going to then say wait a minute this is fraud and that is how these things come out because as as I said at the beginning courts really are only dealt with they can only deal with what's brought to them and so if all of the information is not really brought to them we can't do any so as a judge and you're sitting there and whether it's a criminal judge you've been a trial judge you've adapt it at your appellate court judge now on both civil and criminal the fact that we have the case law and we actually have some of the people's names can help victims in the future with judges you as as a judge that would be persuasive to well it's extremely persuasive because I'm looking at and again it's intent what did this person think that they were doing they knew that they were doing it and I know a lot of the people who were named a lot of the engineers were saying yeah but these you know the insurance company hired me and in their heads they thought if I don't write something that is beneficial to the insurance company they're not gonna use me anymore but as a as a court we can't really look at that we really need to look at what are the facts brought to us what is the fraudulent behavior or what is the bad behavior that was done it's a lot easier on the civil side and John as you pointed out lawyers are doing this when when insurance companies start to see that they're in trouble they're gonna settle they're gonna settle that one case yep and make it go away so that they don't have to deal with the criminal side of it which is coming and so you have you had these whistleblowers that came out and you had Attorney General's and you had Insurance Commissioners who were willing to take the chance and it goes back to being elected versus appointed I think that you have a responsibility to the public and to the people that you serve when you are elected by the people who you serve let me just give you a and is something for contractors just a straight-up rule of thumb the difference between criminal and the civil what we did was the contractors that we had to prosecute many of our home based contract their homes were destroyed too so they were trying to fix their own homes and and so we had some fly-by-night to come through and they took the money and ran they never did a thing that's criminal and we prosecuted them to the hill some of them that did some some work and it hurts it hurts the good reputable builders when you have those come through when they did a little bit of work in it and it didn't work out it got more over into the civil realm okay under the consumer protection act we have both civil and criminal it can be a civil side and it's $10,000 per violation and penalties that can be under imposed and we have a criminal provision of course they're not just the criminal provisions on the consumer protection act you got wire fraud and all these other frauds on the insurance side changing those engineering reports that that's a little bit more gray area if you have a pattern of that activity though that's when you should that's when you're able to prosecutors able to prove a criminal case because the burden of proof in a criminal case and I was a DA for two terms and and and try 200 jury trials or more and and you know you've got to prove to a jury that beyond a reasonable doubt that this person committed this offense on the civil side some standards are clear and convincing evidence or beyond a reasonable doubt is on the criminal criminal side so as far as a pattern for example if you see an insurance company changing reports or they continue to lie you know it can very easily if you can establish a pattern that's when it moves over from the gray area whether it's civil or criminal now we were talking about the impact of civil litigation and and we sued in Mississippi I sued in 2005 it was 2009 before our Supreme Court ruled that we were correct it was a hollow victory everybody had settled or they went bankrupt or they moved away and that's the problem with the civil side of this and the insurance companies have calculated in those factors but the criminal side is something I think in the future that we're going to have to use to try to make sure that that they they follow the the policies that they've written and pay what they're supposed to pay and if I may that's that's the problem with your prosecution role and in our role as regulator many times and the real contractor fraud in Louisiana in the aftermath of Katrina and then Rita as well was contractors who took the money from from the little old lady who they took it from the judge but but lots of widow ladies got checks from rode home or from or from their insurance settlement and paid somebody who probably started out in good faith meaning to restore that person's property for the amount they agreed on and they didn't know what they were doing and they got in over their head and at some point it changed from a incompetence that's not criminal into a I'm getting getting this money and I can't do it I can't pay them back and I can't do the job but didn't you see a lot of people who came in that they had contractors who were there trying to fix their own homes and then you had contractors from out of state amen okay the reputable come storm chasers and it was really bad because the reputable contractors who were in New Orleans were getting together with these other people who were coming in or in Mississippi and then they were messing up their reputations you had contractors in New Orleans that had a plus business Better Business Bureau ratings and other people came in and ruined their ratings there that we are trying to communicate to to a lot of the judges Insurance Commissioners attorney generals is that you know what happens we saw this in Katrina we see these in these big storms thee the storms are getting bigger more and more when you have back-to-back storms like we do you don't have enough contractors in the local area and so we talk about you know you know the what the insurance industry wants to say is they want to say well anybody that's going and chase the storms back right but we need you know these are you know we have the red sauce that comes in to do stuff and what a lot of good contractors they're coming in from out of town they have to come into town because we don't have them in town to be able to do it they have to do the labor and take it it's more expensive but it's more difficult of course you can get over your head and I think that's an important point but but in any event so so any other questions about about what constitutes carrier fraud and how is that being looked at by the various the the judge the Attorney General and the Insurance Commissioner my question is a little bit different than that there's a market failure first of all thank you for the three of you coming out coming here we know that the three of you actually care about consumers but what we find is in many insurance commissioners offices that consumers make complaints and the the agency will say well we're not a consumer protection agency we're in the business of regulating insurance in the state and so that lian us well a lot of states they do I and that leaves the consumer with no place to go if they can't go to their own Insurance Commissioner's offices if they're not going to actually follow up because they're so grossly understaffed in these areas so my question to you is can't we address this with the NAIC and actually help the consumer out and maybe perhaps do in the other states what you're doing commissioner great a great question yep absolutely and and the NAIC is how we regulate insurance we give around them look at this the Attorney General thanks thank you for coming all this way Attorney General we really really appreciate it thank you okay thanks indeed great idea great point and and we're very cognizant of that at the NAIC level and state insurance is regulated has always been at the state level very complex very expensive very important part of our nation's economy and certainly consumers everyday lives but it's done at the state level with bipartisan support Democrat and Republican the year I was president out of naic I was asked to come with a group of my colleagues a small group to talk about the affordable care act in the Oval Office with president obama and he made the point from the very beginning he said as a state senator as a US senator and now as president I support regulating insurance at the state level consumer groups are very mentally in support of that as well as company associations because it is where the most responsive access can be had by both sides by insurers when they have a problem with each other or what have you and by individuals who have insurance problems so yes the NAIC is there to do just that to coordinate this state regulation of insurance at the state level but on a national basis so bring it on okay so I want to thank the Attorney General Insurance Commissioner and Honorable Judge absolutely grateful for your service I love what you guys have done you know it just takes a very special person to step in that role very challenging role my question is in the professions when you have a hold a professional license as a contractor professional license as a public adjuster or you hold a license a professional license as a medical doctor a lawyer even an insurance company you know that licenses to operate in a state an engineering firm has a license to operate in that state if any of the licenses for a contractor public adjuster attorney any these people ever or medical professional were to found for malpractice disbarred committing fraud in any way they would lose their license when these insurance companies get fined they don't lose a license they continue selling they can depending on how serious and egregious the violation is I have the authority to pull insurance company licenses and I have put but mostly for solvency issues many insurance companies out of business I shouldn't say many in twelve years several insurance companies out of business probably on average one or two a year one of the things that we're trying and and have thank you for for those of you in the audience to understand it this is so incredible opportunity to be able to speak judge insurance commissioner and and and and and to have the Attorney General for you to hear another side of the story because you're you're very often hearing one side of the insurance industry or maybe things that you know a judge when things come to court you know things don't generally get to in front of you your honor certainly not to the appellate court if they're really really bad stuff because the insurance company will settle that claim and so you don't generally hear that people who are trying to rebuild insurance which I think a lot of them aren't reporting it you know they're not reporting it now that's why hopefully with the APA and other things we could provide a better more vehicle to be able to do that to give people the resources to be able to no doubt in Congress I would venture to say if you took a poll and of likely voters meaning the most active and informed twenty five percent of our state's population they do not know that they can file a complaint with my department yep you know after Katrina we started in in Orleans Parish what we call the rocket docket and courts can put in place certain time periods to speed up those cases so as the Attorney General said there was a four year window before a lot of these civil cases were heard versus on the criminal side where you have constitutional protections so those cases have to be heard a lot quicker right and so I think states can to help the the consumer is by having cases heard a lot quicker and and if I may add we turn about the NAIC the naic also breaks down into zones and I'm a member of the southeast zone thirteen eleven states or twelve states and Puerto Rico and the US Virgin Islands I am I am we had a zone meeting and brought the law firm out of Baltimore I forget their name that has for general two generations now represented public adjust the association of public adjusters the oldest and largest such Association nationwide and they brought concern turns and issues to us much like the ones we're hearing discussed today like appraisal like contractor issues like licensing issue like bad actors that tarnish the reputation of that very important and valuable profession it was an really really valuable morning of my colleagues and I sitting in a small conference room listening looking at power presentations I actually have it at home at the office about back in Louisiana with an eye toward legislation in this coming session that will start next month so things like this are so helpful to us who are charged with protecting consumers and regulating this industry alright guys round of applause for these guys thank you very much everybody [Music]