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Too Many Insurers Ducked Responsibility
by: Sen. Trent Lott       Filed 8/9/07 GCN

      Former Senate Democratic Leader Tom Daschle of South Dakota and I will visit the University of Mississippi next month to talk with students about bipartisan leadership.  He, a liberal Democrat, and I, a conservative Republican, successfully led the Senate through highly partisan times.  As majority and minority leaders, we didn’t share ideology, but we realized we shared responsibility – not to parties, but to the American people.

Today’s Senate is locked in partisan bickering and leaving untended those critical bills with bipartisan support.  When Washington shirks its responsibility, others may follow that lead.

Insurance is a case in point.

Because so many insurers ducked their responsibility after Hurricane Katrina, Mississippians are expecting Washington to address the insurance crisis.  How the federal government deals with the insurance issues raised by Katrina will most certainly have national consequences.

I have three pieces of bipartisan insurance reform legislation awaiting action.  The first deals with how insurance companies are regulated, or more specifically not regulated.  I’ve cosponsored a bill requiring insurance companies be subject to the same antitrust laws other industries must follow.  It would prohibit them from colluding to artificially manipulate market prices.  For 60 years insurers have been exempted from antitrust laws.  That should end.

My second bill deals with auto insurance.  In Katrina’s aftermath, thousands of flooded cars hit the auction block.  In many cases, the titles to these vehicles did not reflect water damage because insurers today aren’t always required to disclose whether they’ve declared a car a total loss. 

I’m advancing a bill to compel insurance companies to report if a vehicle’s title has been changed or “washed” after the vehicle was declared totaled.  Even if the vehicle has been repaired, consumers should know about past damage and be aware of risks associated with buying a car or truck that’s been flooded or damaged in any way.

Finally, I have a bill requiring insurers to include “plain language” explanations of each policy they sell.  Insurance policies are notoriously long, complex and written in legalese.  My bill would require the company to plainly state in big letters, on the front page of every policy specifically what the policy excludes.

These are all common-sense proposals that both Republicans and Democrats will support if the Senate would take responsibility and act on them.  Meanwhile, without responsible action from Washington, insurers are waiting to see how much responsibility they’ll owe their customers.

You may have noticed that insurers are beginning to “cherry pick” where and what kind of coverage they now will provide.  Despite accumulating record profits last year, the insurance industry has indicated it will not cover locations subject to tornados, mudslides, earthquakes or anywhere within a specified distance of water. 

As we all know, no place in America is free from natural risk.  And most of America’s population is near our three coasts.  That’s why Washington must step up and encourage – and yes, perhaps even require – insurers be more responsible.

Because insurers are trying to reduce their responsibility, some in Washington like Congressman Gene Taylor, are talking about expanding the national, federally-backed, flood insurance program to multiple perils.  I’ve discussed it with both Governor Haley Barbour and Alabama Governor Bob Riley.  It’s something leaders in the Gulf States should study and present to the nation in a thoughtful, bipartisan way.

I have reservations about the government – in reality, taxpayers – guaranteeing insurance in areas where private insurers could and should be providing service.  As we know, government doesn’t always function quickly.  But in the post-Katrina insurance market, the federal government clearly has a greater role and more responsibility, and Congressman Taylor’s bill may be a way to fulfill both.

Insurance is an important national issue begging for leadership from Washington and the private sector.  It’s another critical challenge where Americans must cast aside ideology and accept responsibility – not to a political party or company, but to the people we serve. 

Senator Lott welcomes any questions or comments about this column. 

Write to: U.S. Senator Trent Lott, 487 Russell Senate Office Building, Washington, D.C. 20510 (Attn: Press Office) or Email

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