A California adjuster amplified: "The AG and staff have ethical obligations of office for the benefit of the citizens of Mississippi. There is no place in the contract language that provides coverage for storm surge damage, and most consumers knew that pre-loss. Further, state officials failed to consider long-term detriments to the general public of such suits if it causes insurers to leave the state--or, if a court incorrectly finds coverage, premiums rise above levels many consumers could pay."

A Nevada loss control consultant questioned the ethics of the AG for trying to enforce private contract rights, usurping the duties of the Mississippi insurance commissioner (a universal criticism of responders), projecting a "banana republic" atmosphere that will create insurance availability problems for consumers, and practicing litigation warfare instead of collaborative improvements in coverage and law.

The North Carolina broker agreed: "The AG ethically should work with the insurance commissioner to facilitate settlement of covered claims. Attacking a limited number of insurers is ethically questionable."

An Indiana attorney noted: "The ethical issue is whether the AG's legal theory as to coverage is consistent with established law and the previous actions of the Mississippi insurance commissioner in approving contract language and rates."

One respondent noted: "It is okay for the AG to sue insurers for widespread failure to abide by contract language, but it is not okay to sue just to be more appealing to voters."

A Utah risk manager concurred: "Of course it is unethical to file suit when, and if, they know the claims are frivolous. Too often, 'public officials' engage in litigation for purely political purposes. They love to try their cases in the press to intimidate payment when they have no case in a court of law."

A South Florida producer addressed the ethics of both the AG and consumers: "It appears the AG is grandstanding and looking for political gain. That is unethical. However, many homeowners may believe they should be covered despite the contract language. Such an honestly held belief would lead to ethical actions."

The producer added, however, that "in coastal regions, anyone who watches television or reads a newspaper knows the need for flood coverage, in addition to wind or homeowners coverage. With that public knowledge, looking for full coverage without a flood policy is unethical."

An insurance executive was concerned with the ethics of anyone who would attack the plain and well-established language of a contract: "Without the ability to have agreements for risk transfer in writing with firmly established meanings, we cannot enter into significant financial arrangements. Further, I question the ethics of anyone building in harm's way and expecting the government, charities or insurance companies to pay when those same people suffer the expected losses."

Many readers agreed with the South Florida producer in that consumers are not necessarily unethical in pressing uncovered claims if, unlike the AG, they are ignorant of the facts and law applied to their contracts.

Other comments supporting consumers recognized that they might have been led to believe they had coverage. An unstated comment--but referenced relative to the role of the producer--was that when a consumer is offered flood insurance and rejects it, subsequent criticism of lack of coverage in property insurance is unethical.

A commonly stated ethical concern related to any action by a producer that would create the impression of coverage for storm surge in the absence of a separate flood policy. Most often mentioned was whether or not the producer offered flood coverage when appropriate.

An Illinois producer noted: "If it is relevant, the producer must not only offer flood insurance, the offer and acceptance or rejection must be documented. Proper coverage and limits make any wind/water adjustment problems moot."

The insurer executive agreed: "The actions of the agent or broker are unethical if he or she did not explain that surge losses were not covered in the homeowners [policy], but could be covered by flood insurance."

An association executive from Pennsylvania did not see any issues at all--under one condition: "There are no ethical issues here. The facts of a loss compared to the insurance contract determine coverage when legal precedents are taken into account. This assumes the producer adequately described available coverages."

Insurance companies and their adjusters were also subject to potential ethical violations. A Florida adjuster considered three possible ethical issues for insurers:

o First, benefit of the doubt as to what caused damage relative to the specific coverage involved must ethically be given to the insured.

o Second, insurers must--pre-loss--prepare guidelines for adjusters as to the wind-vs.-water damage perils, and each individual claim must stand on its own.

o Third, ethically the insurer must examine if it or its producers created an illusion of coverage.

A former risk manager from Kentucky noted: "Insurers have no choice but to deny legitimately uncovered claims and pay only relevant covered claims. But it is unethical to exclude coverage based on water damage just to escape covered wind damage."

He added, in clear disgust: "You know executives sat around a table prior to the hurricanes talking about what would happen if the 'Big One' hit. Now we know. Unfortunately, when it comes to ethics, the bottom line gets in the way."

Another ethical theme for insurers related to clarity of contract language--especially for personal lines coverage.

For example, a Texas association executive agreed producers are the front-line representatives to explain complex coverages, and that producers who do not recommend flood coverage when appropriate were acting unethically.

However, he also expanded ethical responsibility: "There is enough public ignorance for all of us in the insurance business to assume some ethical responsibility to clarify wind and water damage coverages."

An Ohio producer commented: "The insurance business has an ethical responsibility to make it clear that all insurance contracts have limitations. What would be helpful is some form of 'Informed Consent.' We have somehow managed to avoid documenting full disclosure."

The insurance executive agreed, in part: "We must find a better way to state what is and what is not covered in our insurance contracts."

The Nevada loss control consultant questioned whether it was ethical for insurers to "socialize loss while privatizing profit." He clearly noted it was unethical for an insurer or its representatives to sell "hurricane insurance" that does not cover storm surge.

He also noted an ethical requirement to give "every possible benefit of the doubt" to the policyholder, adding that "outcome-oriented" claims practices designed to minimize disputed losses are unethical.

He also questioned whether adjusters should deny water claims based only on what he called "generic engineering evidence." Losses ethically must be adjusted on an individual claim basis, he added.

An Ohio insurance consultant was not happy with anyone's ethics. He challenged increasingly complex contract language. He said dynamic risks faced by insureds are automatically inadequately covered by static insurance contracts.

He also criticized insurers for "being unwilling or lacking the fortitude to adapt" to the needs of consumers, noting that many larger businesses are forced to seek alternative methods of risk financing.

Everyone must assume part of the blame, according to the Ohio consultant, who indicated that the federal government was unethical in providing inadequate flood limits based on current replacement costs of structures. He criticized producers for selling policies that will not respond, or are inadequate for customer needs. And consumers came under fire for expecting insurers to provide cradle-to-grave, full coverage for every possible loss.

"The reality is the insurance business lets the courts settle its shortcomings, and no one is willing to develop a real solution," he concluded.