[Congressional Record (Bound Edition), Volume 152 (2006), Part 9]
[House]
[Pages 12341-12342]
[From the U.S. Government Publishing Office, www.gpo.gov]




                    NATIONAL FLOOD INSURANCE PROGRAM

  The SPEAKER pro tempore. Under a previous order of the House, the 
gentleman from Mississippi (Mr. Taylor) is recognized for 5 minutes.
  Mr. TAYLOR of Mississippi. Mr. Speaker, I have the great fortune to 
represent the people of south Mississippi, and on behalf of the people 
of south Mississippi that suffered substantially in the loss of about 
40,000 houses in late August of last year to Hurricane Katrina, I want 
to thank my fellow Americans for all the wonderful things they have 
done for us, for their financial help; for their college kids who came 
down and gave up their spring breaks to help out people; the church 
groups, the Rotarians, and individuals who came to provide medical 
care. There was a tremendous showing of generosity, of support to some 
people who needed it, and I hope I will never fail to thank the 
American people properly.
  Mr. Speaker, I also want to, on behalf of the people of south 
Mississippi, express an outrage on the handful of southern 
Mississippians and southern Louisianans who abused that generosity. I 
do not think anyone wanted to see that happen, and certainly those who 
have broken the law should be prosecuted to the full extent of the law. 
I am sure the people who have read that their tax dollars were used to 
help somebody go to a gentleman's club or get someone get a sex change, 
they should be justifiably angry.
  But let me tell you what the biggest Katrina fraud of all was. It was 
not done by a guy living in a FEMA trailer. It was not someone down on 
their luck. It was by corporate America and, in particular, the 
insurance industry in America, and next week this House will have an 
opportunity to do something about it.
  Mr. Speaker, because of the unprecedented amount of losses because of 
Hurricane Katrina, our Nation will have to put $25 billion into the 
National Flood Insurance Program. I am going to vote for that. It is 
important. It is going to help a lot of people, but I would hope that 
my colleagues, when they do that, would amend that bill to require an 
investigation by the insurance industry in the post-Katrina world, and 
let me tell you what I know to have happened and what I think a Justice 
Department investigation will prove.
  Mr. Speaker, when Congress wrote the National Flood Insurance Plan 
way back in the late 1960s, they called for the insurance industry to 
write the policy, even though it is a Federal flood insurance policy, 
but also to adjudicate the claim, to send their adjusters out to decide 
what happened to that dwelling and how much was it hurt and what would 
it cost to fix it.
  The immediate conflict that was drawn in there was that person who 
may work for State Farm or Allstate or Nationwide, who may have stock 
in their company, who hopes to get promoted with that company, who may 
be looking for a Christmas bonus, is suddenly in a position when he 
walks to one of the 40,000 slabs in south Mississippi that are there in 
the days after the storm, he has got to decide whether the wind did it, 
and therefore, State Farm is going to pay, or the water did it, and the 
taxpayers are going to pay.
  Let me tell you about an interesting coincidence in America. Last 
year, the private insurance industry had a profit of $44 billion. The 
National Flood Insurance Program lost $25 billion, the same year. How 
does this happen? Well, let me tell you what happened.
  That insurance adjuster who works for State Farm or Allstate or 
Nationwide walked out, and in every instance blamed all the damage on 
the water, but that is completely contrary to what the Navy 
Oceanographic Command says. The Navy Oceanographic Command tells us in 
south Mississippi we had hurricane-force winds for 6 hours before the 
water ever showed up.
  So what does this do? For the individual homeowner who had a flood 
insurance policy and a wind policy, they have been denied across the 
board. We have a U.S. Federal judge who cannot hear these cases of 
people who feel like they have been wronged because he, too, is suing 
his insurance company. In the other body, Senator Lott, who has been 
extremely supportive of the insurance industry during his entire 
congressional and senatorial career, is filing suit against his 
insurance company.
  So if the insurance company is willing to take on U.S. Senators, if 
they are willing to take on Federal judges, what do you think the moms 
and dads and grandmas and grandpas of south Mississippi, what kind of 
chance do they have?
  So it is wrong on an individual case, but let me tell you why it is 
wrong for all of you.
  Remember, every time they said the water did it and not wind, the 
taxpayer paid the claim, and so now we have to raise $25 billion, 
probably of borrowed money, to pay claims that should have been paid by 
companies that had a profit of $44 billion. There is no Federal 
regulation of the insurance industry, but there is a law called the 
Fair Claims Act.
  The biggest abuse, the biggest fraud that has occurred since 
Hurricane Katrina has been by the American insurance industry. Next 
week this House will have an opportunity to look into what I have just 
told you, the allegations that billions of dollars that should have 
been paid by the private insurance industry were instead paid by the 
American taxpayer.
  How is it that during the same storm season the private industry 
makes $44 billion while the taxpayers lose $25 billion? Under the 
Federal False Claims Act, if indeed these companies did that, then they 
will be fined millions of dollars, and their corporate executives will 
go to jail, a fate they richly deserve.
  So, Mr. Speaker, I am asking for two things: Next week, when the 
National Flood Insurance Renewal Program comes before the House, I am 
asking for an inspector general investigation of the insurance industry 
to see whether or not claims that should have been

[[Page 12342]]

paid by the private sector insurance industry were wrongly stuck on the 
American taxpayer. And I am asking for your support.
  Mr. Speaker, I will note that two of those insurance industries that 
I think were the biggest culprits reside in Illinois. But I also note 
that two-thirds of all the campaign contributions from the insurance 
industry went to your political party. So the real question is, Mr. 
Speaker, are we going to look out for the American people, or are we 
going to look out for your contributors?
  That decision will be made next Tuesday.

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