Petition for Rulemaking Under U.S. Department of Housing and Urban Development (HUD) “Community Development Block Grants” Regulations to Prevent Misuse of Federal Funds Through Regulating the Use of Contingency Fee Contracts for Legal Services
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Rick J. Lindsey – President, CEO, and Chairman of Prime Insurance Company – respectfully asks that you co-sign a Petition for Rulemaking to HUD.
Prime Insurance Company prepared this petition to bring attention to the potential for state Attorneys General to misuse Federal funds provided by HUD’s “Community Development Block Grant” program to benefit uninsured victims of natural disasters. Lawsuits initiated by Mississippi’s former Attorney General between 2015 and 2018 to relitigate closed claims from Hurricane Katrina in 2005 illustrate the need for related regulations.
Between 2015 and 2018, Mississippi’s former Attorney General sued approximately 11 insurers for the announced purpose of recouping HUD block grant funds for claims closed more than a decade earlier. The argument advanced in support was that federal dollars were used to overpay related losses when insurers denied coverage because all or a portion of the underlying losses were caused by flood and not wind. Block grant funds were then used to pay uncovered losses. Prime Insurance Company was one of the insurers sued in 2018.
The former Attorney General engaged private attorneys on a contingency fee basis without any formal selection process. No HUD regulation currently exists requiring or imposing a selection process for choosing private attorneys engaged by the State to prosecute cases for the recovery of federal funds administered by HUD. To the extent there is no selection process and private attorneys are hired on a contingency fee basis there is no transparency regarding those who are or have been significant donors to the Attorney General’s re-election campaign. HUD regulations requiring or imposing a selection process and transparency would help ensure a State Attorney General’s decision to retain private attorneys to litigate on behalf of HUD would not have the appearance of cronyism.
Fill out the form below to join Rick J. Lindsey and Prime Insurance Company to join the Petition for Rulemaking as a cosignatory.
Disclaimer: By submitting this form, you are consenting to be contacted by Prime Insurance Company and its affiliates regarding this petition. No wet or digital signatures are required. A copy of the Petition reflecting your company’s name as well as your name and title will be provided to you upon submission.
Prime Insurance Company is an excess and surplus (E&S) lines insurance company specializing in property and casualty insurance for specialty and unique risks. Prime writes E&S business in all 50 states and is rated “A” (Excellent) by A.M. Best. Prime has offices in Salt Lake City, UT; Chicago, IL; Exton, PA; and Naples, FL; Prime currently produces $400 million gross premiums annually.
Prime Insurance Company is a committed and trusted resource for producers and insureds. The company uses a profitable business model that has inspired over 40 years of success and growth. Prime’s in-house underwriting, policy services, and risk management teams collaborate and provide a broad range of coverage in specialty classes. The in-house expert claims team has handled over 70,000 claims to date and provides support to producers and insureds throughout the entire insurance process — from risk mitigation to claims handling. Their internal teams work together under one roof to support the producer and the insured to get the most reliable coverage for liability risks.
The company has formed a number of strategic relationships with some of the world’s premier insurance organizations, including RLI, Gen Re, and Arch Reinsurance. They’re also members of WSIA, PLUS, APCIA, PIA, and more.
