Anyone who thought the fallout from Hurricane Katrina would passby now was sadly mistaken. Trial lawyers are still hammering awayat carriers for leaving many policyholders with both wind- andwater-related claims up the creek, and some fear a long-term impacton how catastrophic claims are litigated. I tend to agree with thepessimists. I always expect the worst when it comes to theindustry's reputation, and I am rarely disappointed.

The day before this week's second anniversary of the day Katrinastruck, the American Association for Justice–a group of plaintiffattorneys masquerading as an objective organization–put out a15-page diatribe whose title said it all: Pattern of Greed 2007:How Insurance Companies Put Profits over Policyholders.

The group charged insurers with systematically denyingpolicyholders fair and just” payment on their Katrina claims. (Youcan read our complete news story on the report by clicking here, and you can access the full report by clicking here.)

While the insurance industry is enjoying record profits,thousands of people continue to live in FEMA trailers and othertemporary housing, waiting for their policies to be honored, saidAAJ Chief Executive Officer Jon Haber.

It is a sad and shocking fact that after every natural disaster,insurance companies adopt a pattern of delaying and denying thepayment of just and fair claims, he added. We urge state governorsand insurance commissioners to investigate this outrageous behaviorand take action against it.

Time after time when a major disaster strikes, Big Insuranceputs its profits ahead of its policyholders, according to Mr.Haber. No region of our country is immune from natural disasters,so every American is at risk of being victimized by their insurancecompany as we have seen after hurricanes, tornados and earthquakes.The insurance industrys denial of fair and just claims to Katrinavictims should be a wake-up call for all Americans.

In the “he said, she said” world of objective journalism, theindustry had a chance to comment, but whether anyone was listeningor buying it is another story.

Robert P. Hartwig, president of the Insurance InformationInstitute, called the report a great piece of fiction” and said thenotion that insurers are greedy is absurd. He added that theinsurance industry performed admirably in the wake of HurricaneKatrina, paying $41 billion in insured losses on 1.7 millionclaims.

Later, the Institute, along with three other insuranceassociations, put out a joint statement, calling the AAJ reportpart of a deliberate effort to pad the pockets of the lawsuitindustry by drumming up litigation and high jury verdicts. Thevarious trade groups refuted criticism of the industry point bypoint, but again, I doubt that got much press outside of theinsurance media.

You may be tempted to say this, too, shall pass. Indeed, somedefense attorneys believe that in the grand scheme of things, notmuch will change in terms of how people will react in futurewindstorms.

However, other attorneys are far more cynical, believing thatKatrina suits challenging the longtime flood exclusion will lead tomore such litigation down the road. Indeed, the flood exclusionitself might be at risk.

To read more about this exchange of attorney views, clickhere. And please feel free to offer your views on this diceysubject.