Senate Minority Whip Trent Lott (R-Miss.) was among friends when he gave a speech to the Rotary Club of Edgewater, Mississippi on April 4. Insurance was one of the main topics. Sen. Lott has undergone a metamorphosis since he filed a lawsuit against his insurer, State Farm, for refusing to cover wind damage to the waterfront home in Pascagoula, Mississippi that his family lost to Hurricane Katrina in 2005. He has become a severe critic of the industry, sponsoring such proposals as one calling for the repeal of the industry’s limited antitrust exemption under the 62-year-old McCarran-Ferguson Act.
During his speech, Lott told the Rotary Club that he has refused to accept the settlement offer from State Farm for him and 640 other policyholders represented by his brother-in-law Richard “Dickie” Scruggs’s firm, the Scruggs Katrina Group. He said insurers assumed they could mistreat Mississippians after Hurricane Katrina, as they have done to customers in Florida and Alabama.
“You may try it and you may get away with it, but you’re going to go through the wringer before you get there because we’re not going to take it,” Lott said as Rotarians applauded. He decried record industry profits and an 82 percent pay increase for State Farm CEO Edward Rust Jr. while the industry denies claims, cuts back on coverage and raises rates. “We’re not looking for war,” he said. “We’re looking for peace and a solution. But sometimes, to get a good result, you have to be prepared to take on the fight and take some of the flak that comes with it. In Washington, if you take on the insurance industry, you better bring your lunch. I’ve got mine.”
Lott said insurance representatives in Washington have been “surly” over his legislative efforts to remove the industry’s antitrust exemption and work for other changes. He added that until Katrina, “I regret to admit I did not know the insurance industry was exempt from the antitrust laws.” Lott has been in Congress 35 years.
Lott Ready for Insurance Battle (Biloxi MS SunHerald 4/5/07)
April 11, 2007