President’s Message Time To Hold Insurance


Companies Accountable by Wayne M. Willoughby


For over two decades, big business


(insurance, tobacco and pharmaceutical companies) has spent millions of dollars on a propaganda campaign designed to manipulate public perception of our civil justice system while maligning the lawyers who represent consumers and assure that corporate wrongdoers are held accountable. A recent report from the American


Association for Justice, entitled, The Ten Worst Insurance Companies in America: How They Raise Premiums, Deny Claims, and Refuse Insurance to Those Who Need It Most, exposes the ugly face of corporate greed and misconduct. That report documents an industry that has routinely denied just claims, employed hardball tactics against their own policy- holders while rewarding executives with extravagant salaries and raising premi- ums despite ever increasing profits. Allstate heads the Ten Worst list. The


company publicly touts its “good hands” but privately instructed its adjusters to employ “boxing gloves” tactics against policyholders. This anti-consumer philosophy, according to the Ten Worst, was the brainchild of consulting giant McKinsey & Co., hired by Allstate in the mid-1990s to devise ways to improve the company’s profitability. McKinsey’s solution: reduce payouts on claims, with or without justification. The Ten Worst reports former Allstate


employees characterized the company’s approach as the “three D’s: deny, delay, and defend.” Pursuant to this policy, the Ten Worst states that adjusters were rewarded even if they lied to customers. The company’s theory – frustrate the claimholder long enough and the claim will go away. Industry data is cited in the Ten Worst


as revealing that Allstate has more com- plaints filed against it than almost any


Fall 2008 Trial Reporter 3


other insurance carrier. The Ten Worst notes that last year Maryland Insurance Commissioner Ralph Tyler imposed the largest fine in Maryland history on All- state for raising premiums and changing policies without notifying policyholders. Allstate ultimately paid $18.6 million to Maryland consumers for the viola- tions. Allstate may be the worst in a barrel


of rotten apples, but the nine other car- riers named in the Ten Worst reportedly engaged in equally appalling conduct. An example is the story of a woman who sold policies for disability insurer Unum, number two on the Ten Worst list. When multiple sclerosis left her disabled, the Ten Worst states Unum denied her disability claim for three


years as being “self reported” despite the fact her claim was confirmed by doctors’ evaluations. AIG (number three on the Ten Worst


list) took cold-hearted opportunism to a new level of audacity. According to the Ten Worst, on the day Hurricane Andrew hit, AIG distributed a company-wide memo stating, “This is an opportunity to get price increases now.” While the nation grieved for the victims of 9-11, AIG’s CEO observed, “Opportunities have never been greater” for the com- pany. The Ten Worst notes that AIG’s opportunism crossed the line and ul- timately cost the company $1.6 billion to settle claims for a range of corporate


(Continued on page 5)


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