The Truth About the "Litigation Crisis"

As a Kentucky trial lawyer, I work hard to explain to people why there really isn't a litigation crisis and there simply aren't that many frivolous lawsuits. The insurance industry has done a great job convincing people of things that simply are not true. Here is a great article giving some facts about the "litigation crisis."

Poppe Law Firm Client Awarded $3.9 million in Insurance Bad Faith Case

Yesterday, a Jefferson County jury awarded my client $3.9 million in an insurance bad faith case against AP Assurance for violating the Kentucky Unfair Claims Settlement Practices Act.  I was pleased to be involved with this case along with Ken and Rick Friedman.   Here is the verdict.   You can read the Courier Journal article here
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$2.5 Million Dollar Kentucky Bad Faith Verdict

My friend, and fellow Kentucky bad faith trial attorney, Austin Mehr obtained a $2.5 million dollar verdict last night in a third-party bad faith claim against the Medical Protective Insurance Company.  In short, Austin's client  sued her doctor for causing significant injury to her inner ear.  The doctor admitted he made a mistake, but his insurance company refused to settle the claim.  The case was litigated and ultimately resulted in an arbitration award of $1.6 million.  Austin's client then sued then doctor's insurance company, MedPro, for violating Kentucky's Unfair Claims Settlement Practices Act (aka the Bad Faith Statute) alleging, among other things, that MedPro failed to promptly settle the claim when liability became reasonably clear.  After a two-week trial, a Kenton County Kentucky jury agreed and awarded Austin's client $350,000 for the mental stress caused by the delay in settlement and awarded $2.2 million in punitive damages to punish the medical malpractice insurance company for its behavior.

I have a very similar bad faith case going to trial on Tuesday in Jefferson County Kentucky against American Physicians Assurance.

Below is the "Fact Section" from one of Austin's briefs and here is the jury's verdict.

Medical Protective insured Dr. Del Burchell and his physicians' group Internal Medicine Associates of Northern Kentucky, P.S.C for medical malpractice.  On July 3, 2000, Dr. Burchell attempted to clear earwax out of Aurelia Wiles' ear using an ear lavage procedure by which a syringe injects water into the ear.  The syringe was not properly attached, and when Dr. Burchell pressed on the plunger, the syringe exploded into Mrs. Wiles' inner ear. Liability on the part of Dr. Burchell and his clinic was unquestionably clear. Mrs. Wiles had emergency surgery on July 6, 2000, to attempt repair of the injured ear.  On August 17, 2000, Mrs. Wiles' attorney Terry Moore wrote Dr. Burchell and asked that he have his insurance carrier contact him.   Moore wrote Medical Protective's adjuster Gary Duechle on September 15, 2000, to advise of the severity of Mrs. Wiles' injuries, including nausea, ringing in the ears, imbalance, sleep difficulties, and that it was taking her about two hours just to wash her hair because of the nausea and dizziness. Moore wrote again on November 28, 2000, advising Duechle that Mrs. Wiles had a second surgery and based on the poor prognosis was likely totally disabled. On January 12, 2001, after Mrs. Wiles' condition continued to worsen, Moore specifically demanded the two million dollar policy limits from Medical Protective, which had on December 11, 2000, revealed those limits to Moore. As the one-year statute of limitations approached, Moore had written to Medical Protective to discuss his willingness to extend the statute of limitations so that suit did not have to be initiated against Dr. Burchell, but on March 9, 2001, before suit was filed, Duechle wrote to Moore and instructed him to direct all future correspondence through MedPro's defense attorney Mark Arnzen.         Instead of reviewing and giving credence to the opinions of Mrs. Wiles treating physicians, who were documenting the severity and worsening of her medical condition, Medical Protective consulted a neurologist, Dr. Greg Smith, on February 2, 2001.  Dr. Smith developed the opinion that Mrs. Wiles' traumatic injuries were not the result of the syringe projectile but that they were caused by a coincidental onset of Meniere's Disease around the same time in July 2000.

           Soon after, Arnzen wrote to Duechle on April 4, 2001, and stated, "With respect to the injury itself, Dr. Burchell admitted that there was no product failure and no excuse for the injury which occurred.  He stated that he failed to insure that the top of the syringe was properly secured to the body of the syringe."Even though it knew its insureds were at fault, Medical Protective still made absolutely no attempt to settle the Wiles' claim. Medical Protective, likewise, never responded to Moore's offer to extend the Statute of limitation and suit was filed on May 14, 2001, against Dr. Burchell and his physicians' group, as well as against Medical Protective for violations of the Unfair Claims Settlement Practices Act. ("UCSPA")  

In addition to creating a defense with Dr. Smith, surveillance was conducted on Mrs. Wiles.   In December 2001, video footage showed that because of Mrs. Wiles' condition, she had to be dropped off at her door by her next-door neighbors, who subsequently backed out of her driveway and pulled into their own (about 40 feet away). This verification of the severity of her condition garnered no offer of settlement or negotiation from Medical Protective.  

In January 2002, Mrs. Wiles endured a third surgery, this time a brain surgery that lasted seven hours.  Still Medical Protective made no offer of settlement.  On April 8, 2002, Moore wrote to Storm reiterating his willingness to accept the policy limits on behalf of the Wiles even though there had not been any offer made or even a discussion of an offer from Medical Protective. A letter from Arnzen to Duechle on June 25, 2002, urged Duechle to contact him about the settlement demand.  Soon after, more surveillance was conducted on July 27, 2002. This time the video showed approximately twenty minutes of Mrs. Wiles struggling to slowly work in her garden.  She had to sit on her buttocks because of her imbalance and when she attempted to walk just a short distance, she had to hold a bag and bucket in each arm to balance herself as she battled to stay on her feet. Again, these facts still did not conjure settlement discussions from Medical Protective.

On October 7, 2002, Arnzen wrote to Duechle suggesting that Medical Protective stipulate to liability. Internal correspondence from Duechle to Robert Ignasiak of Medical Protective shows that it "always viewed the case as one of liability…" but that no offer had been extended to settle the case.  Finally, after never discussing an offer of settlement with the Wiles for twenty-seven months, Medical Protective offered $500,000.00 on October 7, 2002.  During this time, Medical Protective had Mrs. Wiles submit to a medical examination with Dr. Smith, who maintained that there was a simultaneous chance occurrence of Meniere's Disease and that Mrs. Wiles was magnifying her symptoms, even though Medical Protective knew that surveillance footage indicated otherwise.

In the meantime, Dr. Burchell and his physicians' group grew nervous about MedPro's claims adjusting, had hired their own counsel to urge Medical Protective to settle for the policy limits.  Attorney Andre Busald wrote to Duechle on November 22, 2002, informing him that Dr. Burchell and his physicians' group were "extremely concerned about the chances of a verdict being rendered against them in excess of the $2,000,000 policy limits – especially where liability is not an issue."Busald followed up again on December 2, 2002, and chided Medical Protective for refusing to attempt to settle the case before trial for the policy limits.  Throughout the years of correspondence, there was never a question as to liability.

Finally, after agreeing to a high-low arbitration agreement, the parties put the claim before an arbitration panel in April 2003, and the panel awarded $1,650,000 on May 15, 2003.  This settlement process was not without detriment to the Wiles, who had incurred substantial medical bills, legal bills, and litigation expenses while suffering from a sizeable loss of income and emotional suffering during the period of time the claim was active.  


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Kentucky Court of Appeals Says "This Insurance Isn't Really Insurance"

My friend, Kevin Burke recently summarized the recent Kentucky Court of Appeals Opinion that ruled that a religious medical expense sharing plan isn't insurance and isn't subject to state insurance regulations.  I think this opinion sets a dangerous precedent and, more importantly, means that the people who have this plan have no legal safeguards in place if the plan refuses to pay their medical bills.

"What is insurance? This appeal attempts to answer that question in the context of a quasi-insurance medical payment program known as Medi-Share.

Medi-Share is a faith-based, medical payment sharing product sold by The American Evangelistic Association (AEA) and Christian Care Ministry (CCM). Medi-Share's Chairman and CEO is former insurance executive, John Reinhold. "Subscribers" complete a detailed application (including medical history) and agree to live by specific biblical and religious principles. If accepted, subscribers pay a monthly "donation" which is not tax-deductible as such per IRS regulations. According to Medi-Share's website (medi-share.org), a "donation" for a healthy married couple age 40-59 is $399 per month. Contributions are pooled, administrative costs (salaries, marketing, claims costs) deducted, and subscribers' medical expenses paid from the remainder. Claims adjusters review claims, negotiate payment to medical providers, and keep subscribers within the preferred provider network. Medi-Share asserts a right of subrogation and reimbursement for payments made. If a subscriber fails to pay the monthly donation, Medi-Share cancels the subscription or charges a late penalty. If a subscriber violates any condition of acceptance, Medi-Share terminates the subscription. Subscribers agree to arbitrate any disputes. Interestingly, Medi-Share explains in its terms and conditions that it is not insurance because it assumes no legal obligation to pay claims. Medi-Share's multi-million dollar marketing campaign touts Medi-Share as "biblical sharing" and the embodiment of Galatians 6:2: "Carry each other's burden, and in this way you will fulfill the law of Christ." 

The Commonwealth filed suit in Franklin Circuit Court seeking a declaration that Medi-Share is "insurance" subject to regulation under the Kentucky Insurance Code. After a bench trial, the court ruled in favor of Medi-Share. The Court of Appeals affirmed in a 2-1 opinion. Judge Rosenblum found that "insurance" is an arrangement for transferring and distributing risk. Because Medi-Share does not guarantee payment, it never transfers or distributes risk, and therefore is not regulated by the Kentucky Insurance Code. Judge Rosenblum noted in dicta that Medi-Share is also exempt from the Kentucky Insurance Code under KRS 304.1-270(1) even if classified as insurance. 

Judge Nickell concurred in part. He described Medi-Share as a "health care contrivance" which the Kentucky General Assembly should "rein in...before it runs wild, stampedes and tramples the rights and reasonable health care protection Kentuckians expect." However, Judge Nickoll agreed that Medi-Share is not insurance. He disagreed with Judge Rosenblum's dicta exempting Medi-Share under KRS 304.1-270(1). The statute requires a direct donation to a specified recipient. Because Medi-Share acts as an intermediary and takes out a hefty cut for administrative costs, it does not qualify for exemption. 

Judge Thompson dissented. He noted that other states consider Medi-Share to be a form of insurance, and expressed his fear that similar programs "will be sold in Kentucky and remain unregulated in an insurance industry susceptible to unscrupulous tactics." Medi-Share bears all the indicia of insurance yet deliberately evades regulation by using unique terminology. Although Medi-Share does not technically share "risk" like other insurers, its actions and advertisements induce people to participate based on the belief of a shared risk. Judge Thompson noted that Medi-Share is not exempt under KRS 304.1-270(7).

Note: An open question is whether Medi-Share violates the Kentucky Consumer Protection Act. Medi-Share markets itself as a reliable alternative to health insurance and represents that "all eligible needs have been met." It communicates its reciprocal obligation to subscriber's through Galations 6:2 which mandates "carrying each other's burden." Despite the biblical quotation, Medi-Share carries no actual burden (i.e. risk) to evade regulatory protection for its subscribers."  by Kevin Burke

Duke University Sues Its Own Insurance Company for Refusing to Pay Claim

Anyone that follows sports, and many who don't, will probably remember the Duke University mens' Lacrosse team scandal.  According to a North Carolina newspaper, Duke has now been forced to sue it's own insurance company, National Union Fire Insurance Co., (an AIG affiliate) for refusing to provide insurance coverage and pay the damages that Duke paid to those players to settle the players' lawsuits against the University.  The lawsuit is likely a combination of breach of contract and insurance bad faith.
"Because National Union has not paid, Duke has been forced to bear the full financial impact of its own defense,' Duke attorneys wrote in the lawsuit.
According to The Herald Sun, the insurer has refused to reimburse Duke for legal bills of $11-million because it believes the university’s policy is capped at $5-million. D uke's demands are considerable: it wants National Union to "advance and/or pay all of Duke?s Defense Costs (as defined in the insurance policies) for the Underlying Claims and the full amount of Duke?s settlement with certain claimants," and "a declaratory judgment (i) that National Union is liable to advance the costs for any future defense of Duke in connection with the Underlying Claims, and (ii) that National Union is liable for any reasonable settlement entered into by Duke in the Underlying Claims and/or any judgment entered against Duke in the Underlying Claims."

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Assigned Bad Faith Claim Results in $9.8 Million Verdict Against Atlantic Mutual Insurance

A federal jury found that Atlantic Mutual "acted despicably and with malice and oppression in wrongfully refusing to settle" a personal injury case involving Harold Leon Bostick in 2002.

Bostick, who served in the Marine Corps from 1991 to 1994, was an amateur weightlifter and bodybuilder prior to his accident. He had earned a master's degree in business administration from Rice University in Texas and was attending law school at Pepperdine University at the time of the injury.

Bostick was doing squat presses when the weights fell on him and broke his neck.  The weight machine Bostick was using didn't have a safety harness that would have prevented the injury.  Bostick sued Flex, the manufacturer of the machine, and Gold's Gym.  Gold's settled for $7.2 million.  Bostick learned that Flex only had a $1 million insurance policy through Atlantic Mutual.  Bostick offered to settle for that amount; however, Atlantic never even responded to the demand.  A jury trial followed, and the award was $16.2 million.  Because Atlantic exposed Flex to a verdict in excess of its insurance policy, Flex assigned its bad faith cause of action to Bostick.

Assignements such as this are not uncommon in cases where the damages are extremely high and the insurance coverages are limited.  The defendant's insurance company has three duties in this situation: (1) provide a defense, (2) evaluate the case and, if possible, resolve the case within the policy limits, (3) advise the insured of the risks of proceeding to trial and the personal exposure that may arise if the verdict exceeds the policy limits, known as an excess verdict.  If the insurance company fails to do any of these things, and a verdict exceeds the policy limits, the insured can sue its carrier for unfair claims handling, also known as bad faith. Following an excess verdict, the insured will usually try to get the inured person to agree to accepting the insured's potential bad faith claim in exchange for an agreement that the injured person will not attempt to collect the judgment from the insured but will instead seek to recover the money from the insurance company.  The original injured party then stands in the shoes of the insured and brings the first party bad faith claim against the insurance company.  Not many of these cases ever reach a jury verdict as most are resolved prior to trial.

To learn more about bad faith, be sure to watch our Bad Faith Video

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Bloomberg.com Expose on How Insurance Companies Cheat Policy Holders (Bad Faith)

Insurance bad faith isn't only happening in Louisville, Kentucky.  It's happening nationwide.  Bloomberg's September 2007 magazine has published a great article exposing how insurance companies deny policyholder's claims when they need help the most.  They explain how insurance companies continue to act in Bad Faith and lowball claims in order to achieve record breaking profits year after year.  The Bloomberg article is available at their site, but I have posted it below in case they decide to remove it at some point.

Keep reading for the full article:

The Insurance Hoax

Property insurers use secret tactics to cheat customers out of payments--as profits break records.

By David Dietz and Darrell Preston
Bloomberg Markets September 2007

Julie Tunnell remembers standing in her debris-strewn driveway when the tall man in blue jeans approached. Her northern San Diego tudor-style home had been incinerated a week earlier in the largest wildfire in California history. The blaze in October and November 2003 swept across an area 19 times the size of Manhattan, destroying 2,232 homes and killing 15 people. Now came another blow.

A representative of State Farm Mutual Automobile Insurance Co., the largest home insurer in the U.S., came to the charred remnants of Tunnell's home to tell her the company would pay just $220,000 of the estimated $306,000 cost of rebuilding the house.

"It was devastating; I stood there and cried," says Tunnell, 42, who teaches accounting at San Diego City College. "I felt absolutely abandoned."

Tunnell joined thousands of people in the U.S. who already knew a secret about the insurance industry: When there's a disaster, the companies homeowners count on to protect them from financial ruin routinely pay less than what policies promise. Insurers often pay 30-60 percent of the cost of rebuilding a damaged home--even when carriers assure homeowners they're fully covered, thousands of complaints with state insurance departments and civil court cases show.

Paying out less to victims of catastrophes has helped produce record profits. In the past 12 years, insurance company net income has soared--even in the wake of Hurricane Katrina, the worst natural disaster in U.S. history. Property- casualty insurers, which cover damage to homes and cars, reported their highest- ever profit of $73 billion last year, up 49 percent from $49 billion in 2005, according to Highline Data LLC, a Cambridge, Massachusetts-based firm that compiles insurance industry data.

The 60 million U.S. homeowners who pay more than $50 billion a year in insurance premiums are often disappointed when they discover insurers won't pay the full cost of rebuilding their damaged or destroyed homes. Property insurers systematically deny and reduce their policyholders' claims, according to court records in California, Florida, Illinois, Mississippi, New Hampshire and Tennessee. The insurance companies routinely refuse to pay market prices for homes and replacement contents, they use computer programs to cut payouts, they change policy coverage with no clear explanation, they ignore or alter engineering reports, and they sometimes ask their adjusters to lie to customers, court records and interviews with former employees and state regulators show. As Mississippi Republican U.S. Senator Trent Lott and thousands of other homeowners have found, insurers make low offers--or refuse to pay at all--and then dare people to fight back.

"It's despicable not to make good-faith offers to everybody," says Robert Hunter, who was Texas insurance commissioner from 1993 to '95 and is now insurance director at the Washington-based Consumer Federation of America. "Money managers have taken over this whole industry. Their eyes are not on people who are hurt but on the bottom line for the next quarter."

The industry's drive for profit has overwhelmed its obligation to policyholders, says California Lieutenant Governor John Garamendi, a Democrat. As California's insurance commissioner from 2002 to '06, Garamendi imposed $18.4 million in fines against carriers for mistreating customers. "There's a fundamental economic conflict between the customer and the company," he says. "That is, the company doesn't want to pay. The first commandment of insurance is, 'Thou shalt pay as little and as late as possible.'"

Although the tension between insurers and their customers has long existed, it was in the 1990s that the industry began systematically looking for ways to increase profits by streamlining claims handling. Hurricane Hugo was a major catalyst. The 1989 storm, which battered North and South Carolina, left the industry reeling from $4.2 billion in claims. In September 1992, Allstate Corp., the second-largest U.S. home insurer, sought advice on improved efficiency from McKinsey & Co., a New York-based consulting firm that has advised many of the world's biggest corporations, according to records in at least six civil court cases.

State Farm, based in Bloomington, Illinois, and Los Angeles-based Farmers Group Inc., the third-largest home insurer in the U.S., also hired McKinsey as a consultant, court records show.

McKinsey produced about 13,000 pages of documents, including PowerPoint slides, in the 1990s, for Northbrook, Illinois-based Allstate. The consulting firm developed methods for the company to become more profitable by paying out less in claims, according to videotaped evidence presented in Fayette Circuit Court in Lexington, Kentucky, in a civil case involving a 1997 car accident.

One slide McKinsey prepared for Allstate was entitled "Good Hands or Boxing Gloves," the tape of the Kentucky court hearing shows. For 57 years, Allstate has advertised its employees as the "Good Hands People," telling customers they will be well cared for in times of need. The McKinsey slides had a new twist on that slogan. When a policyholder files a claim, first make a low offer, McKinsey advised Allstate. If a client accepts the low amount, Allstate should treat the person with good hands, McKinsey said. If the customer protests or hires a lawyer, Allstate should fight back.

"If you don't take the pittance they offer, they're going to put on the boxing gloves and they're going to batter injured victims," plaintiffs attorney J. Dale Golden told Judge Thomas Clark at the May 12, 2005, hearing in which the lawyer introduced the McKinsey slides.

One McKinsey slide displayed at the Kentucky hearing featured an alligator with the caption "Sit and Wait." The slide says Allstate can discourage claimants by delaying settlements and stalling court proceedings. By postponing payments, insurance companies can hold money longer and make more on their investments-- and often wear down clients to the point of dropping a challenge. "An alligator sits and waits," Golden told the judge, as they looked at the slide describing a reptile.

McKinsey's advice helped spark a turnaround in Allstate's finances. The company's profit rose 140 percent to $4.99 billion in 2006, up from $2.08 billion in 1996. Allstate lifted its income partly by paying less to its policyholders. Allstate spent 58 percent of its premium income in 2006 for claim payouts and the costs of the process compared with 79 percent in 1996, according to filings with the U.S. Securities and Exchange Commission. The payout expense, called a loss ratio, changes each year based on events such as natural disasters; overall, it's been decreasing since Allstate hired McKinsey.

Investors have noticed. Allstate's stock price jumped fourfold to $60.95 on July 11 from its closing price on June 3, 1993, the day of its initial public offering. During the same period, the Standard & Poor's 500 Index rose threefold. State Farm's profits have doubled since 1996 to $4.8 billion in 2006. Because State Farm is a mutual company, meaning it's owned by its policyholders, it doesn't have shares that trade publicly.

"This is about as good a stretch as I've seen," says Michael Chren, who manages $1.5 billion at Allegiant Asset Management Co. in Palm Beach Gardens, Florida, and has followed the property-casualty industry for 20 years. The industry's performance during the past five years has been superb, even with payouts for Katrina, he says. "All the stars have been in alignment. There has been decent pricing of products and an extremely attractive and very low loss ratio."

Reducing payouts is just one way the industry has improved profits. Carriers have also raised premiums and withdrawn from storm-plagued areas such as the Gulf Coast of the U.S. and parts of Long Island, New York--to lower costs and increase income, says Amy Bach, executive director of United Policyholders, a San Francisco-based group that advises consumers on insurance claims. "What this says is that the industry has been raking in spectacular profits while they're getting more and more audacious in their tactics," she says.

Allstate spokesman Michael Siemienas says the company won't comment on what role McKinsey played in lowering the insurer's loss ratio and boosting its profits. Allstate did change the way it handles homeowners' insurance claims, he says. "In the early 1990s, Allstate redesigned its claims practices to more efficiently and effectively handle claims and better serve our customers," he says.

"Allstate's goal remains the same: to investigate, evaluate and promptly resolve each claim based on its merits," Siemienas says. "Allstate believes its claim processes support this goal and are absolutely sound."

McKinsey doesn't discuss any of its work for clients, spokesman Mark Garrett says.

Jerry Choate, Allstate's chief executive officer from 1995 to '98, said at a news conference in New York in 1997 that the company's new claims-handling process had reduced payments and increased profit, according to a report in a March 1997 edition of National Underwriter magazine. Insurers can't make significantly more money just from cutting sales costs, he told reporters. "The leverage is really on the claims side," Choate said. "If you don't win there, I don't care what you do on the front end. You're not going to win."

The more cash insurers can keep from premiums, the more they can invest. This pool of assets--most of which the companies invest in government and corporate bonds--is known as float.

"Simply put, float is money we hold that is not ours but which we get to invest," billionaire Warren Buffett, CEO of Berkshire Hathaway Inc., wrote in his annual letter to shareholders this year. "When an insurer earns an underwriting profit, float is better than free," he wrote in 2006. Omaha, Nebraska-based Berkshire Hathaway generated 51 percent of its $11 billion profit in 2006 from insurance.

Claims payouts for the entire property-casualty industry have decreased in the past decade. In 2006, carriers paid out 55 percent of the $435.8 billion in premiums collected, according to the Insurance Information Institute, a trade group in New York. That compares with a 64 percent payout ratio on $267.6 billion in premium revenue in 1996. As companies pay less to policyholders, their investment gains are growing, according to the trade group and research firm A.M. Best Co. in Oldwick, New Jersey. The industry has increased profits by an annual average of 46 percent since 1994, Institute data show. In 2006, carriers invested $1.2 trillion and recorded a net gain of $52.3 billion, up from $713.5 billion invested for a gain of $39.1 billion in 1994.

Insurance companies are no longer following their mandate to take care of policyholders' money and then pay it out when needed, says Douglas Heller, executive director of the nonprofit Foundation for Taxpayer and Consumer Rights in Santa Monica, California. "The whole purpose of insurance is evaporating before our eyes as we continue to send checks to the companies," Heller says. "Insurers are looking to shed their purpose as a risk bearer and become financial institutions."

That kind of criticism is unwarranted, says Robert Hartwig, chief economist at the Insurance Information Institute. He says about 1 percent of policyholders contest what they're offered. "The insurance industry can be justifiably proud of its performance," Hartwig says. "It's in the insurance industry's best interests to settle claims as fairly and as rapidly as possible."

Companies have sharpened the use of technology in the past 20 years to help tighten claims payouts. Insurers following McKinsey's advice on claims processing have adopted computer programs with names such as Colossus and Xactimate. Colossus, made by El Segundo, California-based Computer Sciences Corp., calculates the cost of treating people injured in auto accidents, including the degree of pain and suffering they'll endure and any permanent impairment they may have, according to Computer Sciences' Web site. Xactimate, made by Xactware Solutions Inc. of Orem, Utah, is a program that estimates the cost of rebuilding a home.

Insurers sometimes manipulate these programs to pay out as little as possible, lawsuits have asserted. "Programs like Colossus are designed to systematically underpay policyholders without adequately examining the validity of each individual claim," former Texas insurance commissioner Hunter told the U.S. Senate Committee on Commerce, Science and Transportation on April 11. He also criticized Xactimate. "If you don't accept their offer, which is a low ball, you end up in court," Hunter said. "And that was the recommendation of McKinsey." Computer Sciences and Xactware declined to comment.

Farmers Group, a subsidiary of Zurich Financial Services AG, agreed in 2005 to stop using Colossus to evaluate claims filed by policyholders who have accidents with uninsured or underinsured drivers. The move was part of a $40 million settlement in a class-action lawsuit in Pottawatomie County District Court in Oklahoma in which the plaintiffs claimed the company had repeatedly and wrongly failed to pay enough for crash injuries.

An internal e-mail introduced in the Farmers lawsuit shows the company had pressured its adjusters, whom it calls claims representatives, or CRs, to pay out smaller amounts--and rewarded them when they did.

"As you know, we have been creeping up in settlements," David Harding, a Farmers claims manager, wrote in an e-mail to employees on Nov. 20, 2001. "Our CRs must resist the temptation of paying more just to move this type file. Teach them to say, 'Sorry, no more,' with a toothy grin and mean it." Harding praised a worker for making low settlements. "It can be done as Darren consistently does," he wrote. "If he keeps this up during 2002, we will pay him accordingly."

Farmers said in court papers that it didn't seek to pay less than customers were due. "The e-mail speaks for itself," Farmers wrote. "Plaintiff's characterization of it is denied."

Edward Rust Jr., CEO of State Farm, testified in a 2006 civil case that his company revamped its claims handling through a project called ACE, or Advanced Claims Excellence. McKinsey suggested the use of ACE, according to evidence presented in the district court of Grady County, Oklahoma.

"Technology has allowed us to really streamline our claim organization to be more efficient and responsive," Rust testified. He said the company wanted to cut expenses for claims. In the Oklahoma case, Bridget and Donald Watkins, whose Grady County house was destroyed during a tornado in 1999, accused State Farm of misrepresenting the damage from the storm and won a $12.9 million judgment in May 2006. Watkins and State Farm agreed to an undisclosed settlement after the judgment.

Hunter, who also headed the federal flood insurance program under Presidents Gerald Ford and Jimmy Carter, told Congress that Allstate, with McKinsey's guidance, gave the name Claim Core Process Redesign to its strategy to change payout practices.

As pervasive as computers have become in insurance, the key actor in settling claims is still the adjuster, the person who talks to policyholders and decides how much they should be paid. Allstate has asked adjusters to deceive customers, says Jo Ann Katzman, who worked as a claims adjuster for Allstate in 2002 and '03. She says managers regularly came to her office in Farmington Hills, Michigan, to give pep talks on keeping claim payments down. They awarded prizes such as portable refrigerators to adjusters who tried to deny claims by blaming fires on arson without justification, she says. "We were told to lie by our supervisors," says Katzman, 49, who quit by taking a company buyout in 2003. "It's tough to look at people and know you're lying."

Katzman says an adjuster at Allstate, on orders from a supervisor, told an 89- year-old Detroit fire victim that Allstate wouldn't replace cabinets in her home even though the insurance policy said they were covered. In another case, Katzman says Allstate wouldn't replace a fire-damaged refrigerator--an appliance she says was covered. Katzman now runs Accurate Estimating Services, an independent adjusting company in Bloomfield Hills, Michigan. Allstate's Siemienas declined to comment on Katzman's statements.

Insurers sometimes order employees to offer replacement cost settlements that have no connection to actual prices of home contents, according to testimony in a civil trial. A jury in November 2005 awarded Larry Stone and Linda Della Pelle $5.2 million in punitive damages and $616,000 to construct a new house after finding that Fidelity National Insurance Co. of Jacksonville, Florida, had underpaid the couple by $183,000 when it offered them $433,000 to rebuild their two-story Claremont, California, residence.

During the trial in Los Angeles Superior Court, Ricardo Echeverria, the couple's attorney, questioned Kenneth Drake, president of Canyon Country, California- based RJG Construction Inc., who had been hired by Fidelity's lawyers to evaluate damage estimates.

"Are you telling us that sometimes, because the insurance carriers dictate what amounts they are willing to allow for unit costs, estimators then have to comply with that?" asked Echeverria, according to the court transcript.

"That's absolutely true," Drake said.

"Do you think that's fair?" Echeverria asked.

"Fair or not, it's the name of our business," Drake said.

Drake declined to comment on his testimony. Fidelity is appealing the award.

A New Hampshire case involving a home destroyed in a fire exposed another insurance company tactic: changing a policy retroactively. In April 2003, the Rockingham county attorney in Kingston, New Hampshire, found that a unit of Hartford Financial Services Group Inc. had deleted the replacement cost portion of the homeowner's policy of Terry Bennett after his five-bedroom house burned to the ground in 1993. Bennett, a physician, sued Twin City Fire Insurance Co., claiming his home and its contents--including antiques and fine art--were worth $20 million, not the $1.7 million the insurer paid him. After an 11-year battle, he settled with Hartford in 2004 for an undisclosed amount. "Fighting an insurance company is like staring down the wrong end of a cannon," Bennett says.

An unprecedented number of people stared down that cannon after Hurricane Katrina. The August 2005 storm killed more than 16,000 people in Louisiana and Mississippi, left 500,000 people homeless and cost insurers $41.1 billion. More than 1,000 homeowners sued their insurers in the wake of the storm--the largest- ever number of insurance lawsuits stemming from a U.S. natural disaster.

For insurers, the multibillion-dollar question regarding Katrina was how much of the destruction was caused by wind and how much by water. Property insurance policies don't cover damage caused by flooding; homeowners have to purchase separate insurance administered by the U.S. government. The wind/water issue has spurred allegations that insurers manipulated the findings of adjusters and engineers.

Ken Overstreet, an engineer based in Diamondhead, Mississippi, who examined destroyed Gulf Coast residences, says someone altered his findings on the cause of the damage to at least four homes. "We were working for insurance companies, and they wanted certain results," says Overstreet, who has been a licensed civil engineer since 1981. "They wanted to get a desired outcome, and that's what they did."

Overstreet, who was working for Houston-based Rimkus Consulting Group Inc., prepared a report on the Gulfport, Mississippi, home of Hubert and Joyce Smith for Meritplan Insurance Co. The engineer found that both wind and water had damaged the house. "The winds out of the east would have racked the entire structure to the west and simply lifted the footings up," he wrote.

Meritplan declined to pay anything to the Smiths, telling them that all of the damage was caused by water. The company sent the Smiths what it said was Overstreet's engineering report. "Due to the extent of the structural damage to the residence, the storm surge accounted for the damage," the report they got said. The Smiths called Overstreet and asked him to look at what Meritplan had sent them. Overstreet says he looked at both reports side by side and then told the couple that someone had changed his conclusion after his inspection.

"If they defrauded me, how many more did they defraud?" asks Hubert Smith, 88, a retired chiropractor. "There's a lot of crap going on."

Six lawsuits against Rimkus allege the company altered engineering reports. "Those allegations are absolutely false," says Arch Currid, a Rimkus spokesman. "There's no fact to those claims. We're going to vigorously defend ourselves in court, and we're confident we will prevail."

Ed Essa, a spokesman for Calabasas, California-based Countrywide Financial Corp., the parent of Meritplan, says the company confidentially settled a lawsuit with the Smiths in March.

Another engineer involved in Katrina, Bob Kochan, CEO of Forensic Analysis & Engineering Corp., says State Farm asked him to redo his reports because the insurer disagreed with the engineers' conclusions. Kochan sent an Oct. 17, 2005, e-mail to his staff saying State Farm executive Alexis "Lecky" King asked for the changes. "Lecky told me that she is experiencing this same concern with other engineering companies," Kochan wrote. "In her words, 'They are all too emotionally involved and working too hard to find justifications to call it wind damage.'"

Kochan says he complied so State Farm didn't cut its contract with his company. "They didn't like our conclusions," he says. "We agreed to re-evaluate each of our assignments."

Randy Down, an engineer at Raleigh, North Carolina-based Forensic, wrote this Oct. 18, 2005, e-mail response to Kochan: "I have a serious concern about the ethics of this whole matter. I really question the ethics of someone who wants to fire us simply because our conclusions don't match theirs." The e-mails were made public in a civil case against State Farm in Jackson, Mississippi.

State Farm spokesman Phil Supple says Kochan's e-mail comments are out of context. He says sometimes information in engineering reports doesn't support the conclusions.

One State Farm policyholder in Mississippi was Senator Lott, who lost his home in Katrina. He sued State Farm for fraud in U.S. District Court in Jackson, after the insurer ruled that his home had been damaged by water and refused to pay him anything. "It's long overdue for this industry to be held accountable," Lott, 65, says. Lott and State Farm agreed to a confidential settlement in April.

Lott has introduced legislation to have insurers regulated by the federal government. That would supplant a patchwork system of regulation by states. Insurance has no body analogous to the SEC, which can refer cases to the Justice Department for criminal prosecution. That doesn't happen with insurers. The most that state insurance departments typically do is impose civil fines when companies mistreat customers. Such sanctions are weak and infrequent, says Hunter, the former Texas insurance commissioner. Before Katrina, no state or federal prosecutor had ever investigated a nationally known property-casualty company for criminal mistreatment of policyholders. Mississippi Attorney General Jim Hood says a federal grand jury is probing insurance company claims handling after the hurricane.

There was no criminal investigation after State Farm offered just 15 percent of replacement costs to Michele and Tim Ray, whose house was wrecked by a tornado in April 2006. A contractor estimated the cost to rebuild the Hendersonville, Tennessee, home at $254,000. State Farm made three inspections of the property, Ray says, and sent the Rays a check for $36,000, which the couple returned. A year after the twister, the couple remained in the damaged home, with their tattered roof covered by tarpaulins. In April, after Bloomberg News submitted questions to State Farm about the Ray case, the company inspected the house again. This time, it gave the Rays $302,000. "We decided to call it a total loss and agreed to pay the policy limits after deciding the damage was caused by the storm," State Farm spokesman Shawn Johnson says.

State Farm won't discuss what role McKinsey played in helping the insurer shape its approach toward customers. Similarly, no official at any insurer that hired McKinsey is willing to talk about the consulting firm.

Privately held McKinsey, which has 14,000 employees in 40 countries, has worked for many of the largest companies in the world, according to its Web site. "We take pride in doing what is right rather than what is right for the profitability of our firm," Managing Director Ian Davis says in a quote posted on the site.

McKinsey pioneered the overhaul of the property casualty industry at Allstate. The company hired McKinsey in 1992 after the insurer was spun off from what's now Sears Holdings Corp. of Hoffman Estates, Illinois, says David Berardinelli, a Santa Fe, New Mexico, lawyer who won access to view the McKinsey documents for a limited time during a lawsuit involving an auto accident. McKinsey advised the insurer to pay claims quickly at low amounts while delaying payments for as long as possible for those who wanted large settlements, Berardinelli says. "They're capitalizing on the vulnerability of people," he says.

Berardinelli says McKinsey suggested that Allstate hold so-called town hall meetings with claims adjusters to urge them to pay less to customers.

Shannon Kmatz, a former Allstate claims adjuster, says she attended some of those sessions. She says managers told employees to keep claim payouts as low as possible. "The leaders of those town hall meetings were always concerned that we were doing our part to help the stock price by keeping claims down," says Kmatz, 34, who worked for Allstate for three years in New Mexico in the late 1990s and is now a police officer. "It was obvious from the get-go that all they were concerned about was the bottom line."

Just once, at the May 2005 hearing in Lexington, Kentucky, the PowerPoint slides McKinsey prepared for Allstate were made public. William Hager and his wife, Geneva, who suffered neck and back injuries after the family's car was rear- ended in a 1997 accident in Lexington, sued the insurer, claiming the company failed to cover her medical expenses. The case is scheduled to go to trial in October.

One McKinsey slide prepared for Allstate was called "Zero-Sum Economic Game," a videotape of the court hearing shows. The slide explains that there are winners and losers, and the insurance company can win by paying out small amounts. "There is a finite pool of money," Golden, the plaintiffs attorney, told the judge at the hearing. "Either it goes to the injured victim or it goes to Allstate's pocket as surplus."

Allstate's attorney at the hearing, Mindy Barfield of Lexington, didn't say anything about the McKinsey slides. She didn't return phone calls seeking her comments.

Former federal flood insurance commissioner Hunter says the McKinsey approach exploits policyholders. "McKinsey presented it as a zero-sum game in which the winners would be Allstate and the losers would be the claimants," Hunter says. "I don't think a claims system should be viewed in that light. It's against any principles on how you should settle insurance claims. They should be settled on their merits."

Allstate convinced the judge to seal the McKinsey slides before and after the Lexington hearing. The insurer has resisted attempts to make the consulting firm's work public in courts across the U.S., arguing it contains trade secrets. In 2004, the company was sanctioned by the Bartholomew Circuit Court in Indiana and fined $10,000 for refusing to turn over the records to attorney Richard Enyon, representing an auto accident victim. Allstate held on to the documents and appealed the punishment. The 7th Circuit Court of Appeals upheld the sanction. Allstate then appealed to the Indiana Supreme Court, which hasn't yet made a decision.

Lawsuits in California, Florida and Texas have asserted that McKinsey's work for Allstate helped the insurer cheat claimants. Records show that through the company's Claim Core Process Redesign project, Allstate encouraged policyholders to accept small settlements on the spot.

The redesign also became a blueprint for fighting more claims in court as Allstate increased its legal staff, according to a 1997 company newsletter obtained by David Poore, a Petaluma, California, attorney who has represented homeowners in lawsuits against carriers. "The bottom line is that Allstate is trying more cases than ever before," the newsletter said. "If the offer is not accepted, Allstate will go to court, if necessary, to prove the evaluation process is sound."

McKinsey-style tactics have spread to insurers large and small--as homeowners discovered after three wildfires ravaged Southern California in 2003, including the one that hit northern San Diego. While Katrina struck thousands of low- income families in New Orleans, the San Diego fire affected mostly affluent homeowners, who fared no better with their insurance companies.

The fire obliterated large sections of Scripps Ranch, a community of 30,000 that sits atop a sagebrush and eucalyptus mesa, where homes can cost more than $1 million. After flames swept through the area on winds of up to 50 miles per hour, residents say they expecte

PBS Documentary on Why Insurance Companies Deny Legitimate Claims

I see a lot of insurance bad faith here in Louisville, Kentucky.  Finally, the national media is starting to take notice that insurance companies continue to post record profits at the expense of the policyholders to whom they have made promises.  Please watch this great 30 minute PBS special called Home Insurance 9-1-1.  After watching this, you will know more about insurance bad faith than most lawyers.   Hans Poppe

From Good Hands to Boxing Gloves-Lexington Lawyer Seeks 1.45 billion in Bad Faith

In a bad faith insurance trial scheduled to begin in Fayette Circuit Court in Lexington, Kentucky, attorney Dale Gordon is seeking $1.45 billion dollars in damages against Allstate Insurance company on behalf of Geneva Hager of Richmond, Kentucky.

Insurance Bad Faith is when an insurance company unreasonably refuses to pay a claim, or delays paying the claim and forces the case into litigation.  In Kentucky, in addition to common law first-party bad faith, we have the Kentucky Unfair Claims Settlement Practices Act.  This statute obligates insurance companies to deal fairly with their own insureds (first-party) as well as third parties that may have been injured by the insurance company's insured. 

According to the Lexington Herald Leader, "the trial appears to be only the third time internal company documents that Allstate has fought to keep secret will be shown to the public. (The first was when Hager asked for class certification, which was ultimately denied, in a hearing in May 2005.) The documents, known as the McKinsey documents, were created by an international consulting firm and outline how the insurance giant transformed its claims handling in the 1990s."  "The most famous document, which became the title of a book, plays off the company's slogan. It states that claimants who accept Allstate's offers are in "good hands" while those who object get the "boxing gloves." Trial lawyers call the McKinsey documents a blueprint for fraud"

The case arises out of Allstate's refusal to settle a car accident case. Hager suffered neck and back injuries in 1997 after the truck in which she was a passenger was rear-ended. It took two years for her to resolve her pain-and-suffering claim, which was settled for the $25,000 policy limits four days after it was scheduled for trial, her attorneys have said.

Orginally, attorney Golden was seeking $800 million in damages, but has now doubled that figure, a mistake according to New Mexico trial lawyer David Berardinelli. "That's the worst thing they could do, that is a typical mistake a lot of these guys make, because then it looks like greed. It's like, 'So we want to make you a billionaire for why? This person here? Over a $25,000 car accident?' People have a hard time with that."

Dale Golden has achieved has a very good reputation and has had several large plaintiff's verdicts in the past.  I hope he gets another big one here.

 

Things Heat Up in Lexington Bad Faith Trial

Sounds like Dale Golden is heating things up in the $1.4 billion Lexington bad faith trial.  Today, was the examination of noted epidemiologist Michael Freeman who testified that Allstate's MIST (Minor Impact Soft Tissue) studies were bogus and not based on science. 

Golden also examined an Allstate employee on how they handle these types of claims.  According to the Lexington Herald leader, things go a little testy between the two of them.  My ability to link isn't working properly, so here it is http://www.kentucky.com/181/story/191852.html 

Hans Poppe

Insurance Company Caught Falsifying Documents in Order to Deny Benefits

According to the Sun Herald-Leader, Texas Mutual Insurance Company was caught falsifying medical records so it could deny an injured worker his benefits.  Judge Martin Hoffman found that Texas Mutual committed fraud by falsifying a medical record in pending litigation in which the insurance company tried to overturn an order from the State of Texas to pay for a workplace injury.  The judge ruled that Texas Mutual's fraudulent manipulation of the medical record was committed "knowingly and intentionally" to "gain an advantage in this suit."
Judge Martin ordered the insurance company to pay $30,000 as a sanction and post the court's order to its website.  I looked for the order but did not see it. 
Texas Mutual has been a strong proponent of changing the laws to cap damages and to shield insurance companies from bad faith litigation. 
Juan Mr. Narvaez is represented by Mike Doyle, Jeff Raizner, and Quentin Haag, of Doyle Raizner LLP in Houston, and Peter N. Rogers, of Rogers, Booker & Lewis in Richardson, Texas.
Fortunately, Kentucky has laws that help hold insurance companies accountable when they wrongfully deny benefits to Kentucky claimants.  In Kentucky, an insurance company can be sued for "bad faith," and violations of the Kentucky Unfair Claims Settlement Practices Act.
Hans Poppe

Florida Kicks Allstate Insurance Out of the State

According to the Lexington Herald Leader, Florida has had enough of the way Allstate treats its insureds.  According to the article, "A day after telling Allstate Corp. to stop writing new car insurance policies in Florida, state regulators told the company to stop writing any new business in the state, including home insurance. Insurance Commissioner Kevin McCarty had initially planned to clamp down on just the company's auto business and its four companies doing business in Florida for its failure to fully comply with a state subpoena. But McCarty expanded the suspension Thursday to include Allstate's 10 companies nationally and all of its insurance lines." 
Florida regulators want to know why Allstate refuses to comply with the new legislation that requires all Florida insurers to lower premiums.  Instead, Allstate has requested permission to raise premiums.
Among the subpoenad documents are the famous McKinsey Powerpoint slides that allegedly details Allstate's cost cutting strategy by denying claims.
Readers of this blog will recall the McKinsey documents and Allstate's "Delay, Deny, Defend" strategy was the subject of an unsuccessful trial in Lexington, Kentucky a few months ago when the jury returned a verdict in favor of Allstate in a lawsuit filed by Geneva Hager of Richmond, Ky., over a car wreck. Hager had sought more than $1 billion.  Hager, and her attorney Dale Golden alleged that Allstate's procedures violate Kentucky insurance laws.
Hans Poppe

California Judge Awards $9 Million In Bad Faith Case

A california judge has awarded over $9 million in damages to a California women.  Patsy Bates said she had undergone surgery to remove a tumor and had received her first two chemotherapy treatments when doctors stopped treating her because her bills were going unpaid.  Health Net Inc must now pay the $120,000 in unpaid medical bills, $750,000 in emotional distress, and over $8 million in punitive damages.  The case was arbitrated by Sam Cianchetti  and Ms. Bates was represented by California bad faith attorney William Shernoff. 

Kentucky is lucky in that we have strong bad faith laws to help protect consumers from unfair insurance practices, including unfair claims denial.  However, many times Kentucky's bad faith laws provide no protection becuase most health insurance polices these days are ERISA policies, meaning they are governed by federal law.  If an ERISA insurance company denies a claim they generally are immune from bad faith lawsuits.  Unfair, but reality.

Hans Poppe

Hans Invited to Lecture on Insurance Bad Faith.

I have been invited by the National Business Institute to lecture on "Bad Faith Insurance Claims in Kentucky."  Specifcally, I will be focusing on the following topics: Indentifying the type of Tort, Related Causes of Action and Damages and Gaining a New Perspective on Pre-Trial Practice.  I will be joined by J. Michael Hearon, who will be discussing Emerging issues and current laws; Lee Sitlinger, who will discuss Gathering Information Critical to the Case and Successful Courtroom Strategies; and Nancy Loucks, who will be discussing Ethical Consequences and Avoiding Bad Faith Claims for the Insurance Professional.  You can see the seminar outline here:
Hans

Jury Awards $21 million dollars against USF&G Insurance Company

In what is being reported as the largest verdict in Louisiana or Mississippi for post-Katrina claims handling, a New Orleans jury awarded a grocery store $21 million dollars for damages his stores received in the hurricane aftermath.
The jury heard evidence that United Fire & Casualty Insurance Co. acted in bad faith by delaying paying the claim becuase of the financial stress it was under.  Attorney Phillip Franco represented the store owner and said the jury's decision came after hearing "that this insurance company delayed and refused to make payments because of the financial stress put on that company because they didn't purchase enough reinsurance to cover the extent of the catastrophic losses caused by Katrina."
Hans

Allstate Hit for $10 million in Bad Faith Case--Drunk Driver Now a Millionaire....

Now here is a truly unusual bad faith insurance case against Allstate.

What's unusual is not that Allstate was found to have acted in bad faith in denying the payment of an automobile accident claim, what's unusual is that the facts play out so that the at-fault driver (who was drunk) will actually become a millionaire as a result of Allstate's refusal to pay his policy limits to the people he injured in a car accident.

In short, here are the facts: Allstate Insurance Company was found to have acted in bad faith for refusing to pay its insured's $50,000 policy limits to two severly injured people. To be more precise, a jury returned a verdict against Allstate for $5.8 million in compensatory damages and $10.5 million in punitive damages. According to the Missouri Court of Appeals, Allstate did not settle a demand for insurance policy limits of $50,000 made against its insured, Wayne Davis, Jr., by Edward and Virginia Johnson. The Johnsons made the demand after Davis drove across the center line of a Camden County highway in March 2000, and crashed head on into the Johnsons' car. The Johnsons suffered life-threatening injuries that required extensive hospital treatment and medical bills of over $300k. After Allstate failed to settle, the Johnsons sued Davis. Davis consented to a $5 million judgment and negotiated a settlement agreement. As part of the settlement, the Johnsons agreed not to collect any of the $5 million judgment from Davis in exchange for his assigning to the Johnsons 90 percent of his claim against Allstate for bad faith refusal to settle. The Johnsons and Davis jointly sued Allstate for bad faith refusal to settle a claim and for equitable garnishment.

Note that I said Davis only assigned 90% of his claim. This means he is entitled to 10% of the $10.5 million in punitives, or about a million dollars. While at first blush, this may seem unfair, a closer examination of the facts shows why it may not be so far afield.

Davis immediately admitted he was drunk and responsible for the accident. The Johnson's lawyer demanded Davis' small insurance policy early and often--Allstate refused to pay it. More importantly, Allstate never told Davis that he was financially responsible for any judgment over and above his policy limits should the case proceed to trial and a jury render a verdict of more than $50k. To say it in other words, Allstate failed to protect its insured by settling the case for 50k when it had the chance and thereby exposed him to a potential verdict of millions of dollars. That is what's known as first party bad faith. When the insurance company gambles with the money and assets of its insured, they are violating the contract of insurance and should be held responsible.

hans

Kentucky Court of Appeals Takes Away $28 million Bad Faith Verdict

In a lengthy 72-page opinion, Kentucky's Court of Appeals has set aside a $28 million dollar verdict in a bad faith case.  The original verdict was $10,000,000 in compensatory damages and $18,000,000 in punitive damages.  The trial court reduced the punitive damages to $10,000,000 (likely to comport with a 1-1 ratio which is presumed constitutional).  The Court of Appeals didn't think that was enough.  The three justice panel ruled that the entire verdict was given under the influence of "passion or prejudice or both."
I'll give an in-depth analysis later, but here it is http://www.poppelawfirm.com/library/Cincinnati_Insurance.pdf 
Hans