Since filing my first-hand blog reports on the how insurers werebeaten like a piata at a recent Congressional hearing on HurricaneKatrina claims, I've heard some grumbling that perhaps my accountwas too theatrical, and that I didn't give a fair assessment of howthe industry's sole witness–Insurance Information InstitutePresident Bob Hartwig–represented the business. One partycomplained that I made him sound like a lamb being led toslaughter. All I can tell you is, you had to be there.

(If you want to refresh your memory, or check out my coverage forthe first time, I filed two blog entries on the hearing. You canaccess “Insurers On The Hot Seat” here and “Mr. Friedman Goes To Washington” here.)

I do want to say for the record that Bob Hartwig did the bestjob he could presenting the industry's case that the vast majorityof Katrina claims were settled quickly, and that only a smallpercentage are still in dispute. Indeed, the industry doesn't getenough credit for settling as many claims as quickly as they didunder such extraordinary circumstances.

Bob delivered his usual flawless, fact-based performance, calmlyciting tons of statistics and remaining cool under fire as he wascross-examined by openly skeptical, even hostile members ofCongress.

However, the fact is that the deck was clearly stacked againstthe industry that day. Critics of the business had their mindsalready made up, and nothing Bob Hartwig or anyone else could saywas going to change their guilty verdict. They weren't about to letthe facts get in the way of a good insurer bashing. Bob became astraw man, symbolic of an industry that can make statistics proveanything, while policyholders were unfairly ruined byKatrina–including some prominent members of Congress leading thecharge against insurers, such as Sen. Trent Lott, R-Miss., and Rep.Gene Taylor, D-Miss.

The open assumption by many on the Congressional panel was thatinsurance companies had not served policyholders well inMississippi–that most adjusters had been pressured to change theirstories to deny coverage, that all policies were written tounfairly keep consumers from collecting, and that the industry'sfederal antitrust exemption was allowing carriers to get away withcollusion and other anticompetitive behavior.

It was an Alice In Wonderland scenario, with reality hard tofathom through the distorted prism of Congressional politics.

That said, I stick with my earlier assessment that insurers canweather this storm if they play rope-a-dope with Congress. Thisstrategy was first employed by Muhammad Ali against George Foremanin the heavyweight championship boxing match of 1974. The older,wiser Ali was able to wear out the stronger but more easily-windedForeman by simply absorbing body blows until the doomed champpunched himself out.

Insurers need to similarly hold their ground, sticking to thefacts and warning about the consequences of simply stripping awaythe antitrust exemption. They must keep emphasizing how a reckless,shortsighted, knee-jerk reaction would in the long run do consumersmore harm than good.

Bob Hartwig and company will take more than their fair share ofrhetorical blows in this war of words, but I believe Congress willgrow arm-weary as attention is diverted to more important agendaitems involving the industry, such as renewing the Terrorism RiskInsurance Act.

Frankly, I don't think Congress has the stamina to see thisfight through, or the stomach for the fallout that would resultfrom foolishly killing the McCarran-Ferguson exemption. They simplyhaven't thought through what would happen next, or considered thedamage they might do to the very consumers they are trying toprotect.

Meanwhile, as more Katrina claims are settled, this latestattack on the industry, too, shall pass.