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Scruggs, Hood and hurricane reinsurance



In a Sept. 12 BestWire interview, Dickie Scruggs demagogically suggested that given the role of international reinsurance his proposal for voiding flood exclusions in the wake of Katrina would merely fob off the cost of Gulf rebuilding on "Swiss gentlemen". But Washington, D.C. policyholder attorney Marc Mayerson of Spriggs & Hollingsworth, on his Insurance Scrawl blog, argues that reinsurers may well escape such costs on the grounds that they are obliged to reimburse only payments triggered by the actual terms of insurance policies, and not to compensate primary insurers for lawless expropriation on the one hand, or (assuming an out-of-court settlement) for "goodwill" payments over and above what contractual language specifies. "The European reinsurers probably have little to fear -- other than the threatened insolvency of their customers (i.e., the insurers)."

The N.Y. Times's softball coverage of Scruggs and his claims is here. Mississippi Attorney General Jim Hood's pleading, in his lawsuit attempting to expropriate the insurers, is here, and his press release here (both PDF).

 

 


Rafael Mangual
Project Manager,
Legal Policy
rmangual@manhattan-institute.org

Katherine Lazarski
Manhattan Institute
klazarski@manhattan-institute.org

 

Published by the Manhattan Institute

The Manhattan Insitute's Center for Legal Policy.