In post-Katrina New Orleans, many have been suprised to learn that AIG chief Edward Liddy has been ardently defending the sanctity of contracts in order to pay $220 million in bonuses to the troubled company. But previously, Mr. Liddy ran Allstate Insurance from 1995 until 2006. Many people in the Gulf Coast are painfully aware that contracts between homeowners and the insurance industry didn't mean too much back in those days. Of course the Louisiana Insurance Commissioner Jim Donelon defends Liddy, as Donelon continues to be the industry's model rep and unofficial spokesperson. One day when Donelon gets defeated I'm sure there will be a cushy insurance industry lobbying job waiting for him à la Montana's Marc Racicot. Either that or he'll wind up in jail like so many former Louisiana insurance commissioners.
Read more about it in this excellent article in the Times-Picayune: "Contract Sanctity at AIG, but Not Allstate?" by Rebecca Mowbray
It's not a two way street. Never has been and maybe never will be. However, the swindle of swindles may signal the beginning of the proverbial two way street.
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