Unbelievable Corruption and Fauxonomics in US Storm Cleanup
1) NY governor declares that flood insurance deductibles will be waived for everyone in NY state. This despite those insurance policies being private contracts. Many of the homes covered are in beach towns and the deductible is 5% of the value of said (often pricey) homes. This move is of dubious legality, but he's basically threatening to use the power of the state to void a key actuarial allowance that keeps insurance policies affordable.
2) Some utilities in the south sent workers up to NJ to help. A local electricians union in NJ sent one of the utilities paperwork claiming these workers had to have a union affiliation to work in NJ. The workers returned to their staging area in Virginia. Predictably, the union is denying this.
Holy shitsnacks, what is wrong with these people.
1) http://www.reuters.com/article/2012/...8A114H20121102
Spoiler:Can Cuomo interfere in storm insurance contracts?
By Alison Frankel
(Reuters) - On Wednesday night, New York Governor Andrew Cuomo made a startling announcement: Homeowners "will not have to pay" so-called hurricane deductibles when they file insurance claims for damages caused by Sandy. In a follow-up news release Thursday morning, after other governors joined Cuomo in the measure, Cuomo's Department of Financial Services, which regulates insurance companies, said that it had "informed the insurance industry that hurricane deductibles should not be triggered for this storm."
Can Cuomo and his DFS chief, Benjamin Lawsky, do that? Are state governors empowered to determine, by executive fiat, what constitutes a hurricane? The answer to that question, according to three insurance lawyers, is no -- and yes.
Here's why. The insurance industry is state-regulated. In New York, insurance policy language on hurricane provisions -- which typically impose deductibles of between one and five percent of a home's value for damages caused by hurricanes -- must be approved by the Department of Financial Services, according to Marshall Gilinsky of Anderson Kill & Olick, who represents policyholders in disputes with insurers. So, in a way, state insurance regulators have already decided what constitutes a hurricane, for the purposes of insurance coverage, by regulating the provisions that define hurricanes.
That's not as absolute a definition as you might think, though. Gilinsky and Texas policyholder lawyer Steve Mostyn of the Mostyn Law Firm pointed out that there's often considerable uncertainty in meteorological parameters included in hurricane deduction provisions. One critical factor, for instance, is wind speed, which is how the weather service distinguishes hurricanes from less severe storms. (Other factors are the National Weather Service's categorization of the storm and the time lapse between its landfall and the damage it caused.) But wind speed varies depending on where, when and how it's measured. It's conceivable that homeowners affected by Sandy could point to one measurement of wind speed that wouldn't trigger the hurricane deductible and insurers could point to another wind speed measurement that would require the higher deductible.
With his pre-emptive announcement Wednesday, Gilinsky said, Cuomo sent a warning message to insurers: The state is watching you. "He's saying that the facts are such that higher hurricane deductibles are not warranted," Gilinsky said. "That's consistent with his role as a consumer advocate and regulator."
But for all the regulatory leverage Cuomo and DFS chief Lawsky enjoy, they do not have the final say on whether Sandy was a hurricane for the purposes of insurance deductibles. Insurance policies are private contracts between property owners and insurers. Even the state governor isn't empowered to interfere with those contracts unless a court approves it. "Ultimately," said one insurance lawyer, "this is something a court will decide, not Governor Cuomo or Mr. Lawsky."
That said, the governor's pronouncement will probably influence any court called upon to decided whether Sandy was a hurricane when it hit New York. "Regulators can't decide what the contract says, but a court would take that into consideration," said Mostyn, who represented homeowners in Galveston, Texas, in litigation stemming from 2008's Hurricane Ike. "The governor's view isn't controlling but it weighs heavy."
If an insurer opts to defy the governor and his insurance chief, it will face not only heightened regulatory scrutiny but also public relations costs, said policyholder lawyer Gilinsky. These are companies that run television commercials promising to stand by their customers, he said. Imposing a hurricane deductible in the face of Cuomo's pronouncement, he said, "tells you you're not in good hands, you don't have a piece of the rock, whatever."
Mostyn predicted that the real insurance fight will be over whether wind or water caused the catastrophic destruction along the Jersey Shore. Hurricanes Katrina and Ike spawned years of litigation between insurers, who asserted damages were the result of flooding and thus not covered, and homeowners who said insurers were liable for havoc wreaked by high winds. After Ike, Mostyn obtained more than $350 million from just one Texas insurer that originally denied claims by property owners in Galveston. "I looked at pictures of the Jersey coast," Mostyn said. "They looked exactly like Galveston."
2) http://www.nj.com/news/index.ssf/201...needed_un.html
Spoiler:
Alabama utility crew needed union affiliation to work in N.J., official says
By Richard Khavkine/The Star-Ledger
on November 02, 2012 at 1:04 PM, updated November 02, 2012 at 3:17 PM
A 6-man crew dispatched from a municipal utility in Decatur, Ala., to help restore power in Seaside Heights returned home after the company was sent paperwork implying that the crew needed union affiliation before going to work in the Ocean County town, the utility’s general manager, Ray Hardin, said this morning.
The crew, which was at a staging area in Virginia as the company awaited “clarification,” eventually returned to Alabama on Thursday after getting word that Seaside Heights had received the help it sought, Hardin said in a statement.
Hardin said the Decatur Utilities received documents from the International Brotherhood of Electrical Workers “that implied a requirement of our employees to agree to union affiliation while working in the New York and New Jersey areas.”
Hardin and a company representative did not respond to a request for details about the documentation, including which IBEW local might have sent it.
Jim Spellane, chief spokesman for the IBEW’s national office in Washington, said he did not know from where the paperwork might have come. "We didn't send it to them," he said.
Spellane said national union officials were looking into the matter.
Although Hardin says that “at no time were our crews ‘turned away' ” from the Seaside Heights utility, “it was and remains our understanding that agreeing to those requirements was a condition of being allowed to work in those areas.”
Seaside Heights' municipal electric utility could not be reached for comment this morning, and it is unclear which IBEW local represents those workers. A representative in the union's district office, in Philadelphia, reserved comment until later in the day.
Major utility companies in New Jersey, however, said that they are welcoming any and all out-of-state crews.
"We take crews as they become available,” said Ron Morano, a spokesman for Jersey Central Power & Light. “Everyone understands this is an all-hands-on-deck event.”
Morano said crews from throughout the nation were now working in JCP&L’s service area, including from California, Idaho, Kentucky, Florida, Michigan and North Carolina.
He did suggest that municipal companies might have issues working side-by-side with non-unionized contractors.
A Public Service Electric & Gas spokeswoman also said the extent of damage from Monday’s superstorm called for as much manpower as could get here.
“We have not turned any mutual-aid crews away,” Deann Muzikar said. “We’re taking any help we can possibly get.”
As of Wednesday, about 1,050 out-of-state contractors were working in PSE&G’s service area, she said, including from utility companies in Canada, Texas, Illinois, Wisconsin, Missouri, Pennsylvania and other states.
“Every day we’re getting more and more,” Muzicar said.
One IBEW local president, Chip Gerrity, who is also business manager of Hightstown-based Local 94, also said it would be foolish to favor one set of workers over another after the devastation to the electric infrastructure.
“I want union guys first, obviously,” Gerrity said. “But with an event like this you want everybody you can get.”
Two other Alabama utilities were initially mentioned by a Huntsville (Ala.) television station in a story that said non-union crews had been turned aside.
One of those, Trinity, Ala.-based Joe Wheeler, was never in New Jersey and is unionized, its CEO, George Kitchens, said this morning.
Eight Wheeler workers were instead dispatched to Maryland before the storm hit, and is already back home, a company spokeswoman, Mandi Phillips, said.
“We are headed back home,” she said. “We were never turned away.”
Bill Yell, communications manager for Huntsville Utilities, said he was not aware that a union issue had prevented three of that company’s crews from working in New Jersey.
Huntsville originally sent two 3-man bucket crews and one 3-man pole-setting crew to Seaside Heights, but that all nine had since been dispatched to Long Island, Yell said.
“The reason we’re not working with the New Jersey system is that they had all the crews they could handle,” he said.
The fact that those crews are not unionized did not have any effect, he said.
“They didn’t have any problems with us,” he said.[/quote]
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Originally Posted by Lewkowski
Remind me why those contracts exist in the first place.
