Industry Issues | ERM & Emerging Risks

Emerging Risk – Litigation

Emerging Risk - Litigation 
(risk assessment: legal, regulatory, reputational, underwriting, financial)

Mississippi Lawsuits Threatens Legal Uncertainty for Industry

More than a decade after Hurricane Katrina, the long-running legal battles with Mississippi's attorney general continue. Currently, the state is using several plaintiffs' law firms to pursue subrogation lawsuits against insurers. The suits allege that after Katrina, some companies improperly adjusted claims resulting in lower claim payouts under then-existing policies, leaving the state's Homeowners Assistance Program to pay homeowners whose insurance settlements did not cover all of their property damage.

By reopening settlements from more than a dozen years ago, the state could establish a chilling precedent that causes long-term legal uncertainty and new insurance affordability and availability challenges in the marketplace. PCI is strongly opposing--and aggressively advocating against--these egregious actions by the state's attorney general.

In response to this emerging threat, PCI is drafting proposed legislation to further rein in the attorney general's ability to hire outside counsel. We are working with our members on language for this legislation, which we plan to have ready for introduction when the Mississippi Legislature convenes January 8, 2019. If enacted, this legislation will be instrumental in restoring certainty in the Mississippi insurance marketplace. 

To help lay the foundation for legislative action, we have been in contact with policymakers to express our outrage over the attorney general's inappropriate use of the legal system. PCI is also contracting with an actuarial firm to estimate the costs of reviving Katrina claims for the Mississippi economy and policyholders. We will be working aggressively with stakeholders and the media to underscore the impact that these lawsuits could have on consumers across the state. On the legal front, PCI will be filing an amicus brief in related interlocutory appeals as well as considering other judicial advocacy strategies.

PCI is committed to protecting product certainty and will continue to engage with our members as we execute a comprehensive advocacy campaign in Mississippi to protect the insurance marketplace.
 

For further information, questions, and/or engagement, please contact Paul Blume (Paul.Blume@pciaa.net or 847-553-3815).