Insurers are keeping a stiff upper lip as they prepare to take the hot seat on Feb. 28, when an oversight panel of the House Financial Services Committee will convene to probe the handling of Hurricane Katrina claims. Rep. Gene Taylor, D-Miss., who vows to lay out the case against carriers at that time, has already fired his first salvo, insisting he is “convinced” the industry wrongfully billed the National Flood Insurance Program for damages that were really wind-related, and therefore covered under standard homeowners policies. What evidence will Rep. Taylor present to prove his case?

Rep. Taylor has emerged as a one-man wrecking machine after his own home was damaged during Katrina, but his carrier–State Farm–begged off his claim. Beyond calling for a Congressional probe, he has also been pushing for revisions in the industry's federal antitrust immunity, and today will propose legislation creating an all-perils policy–covering both wind- and water-related damages for both homeowners and small businesses under the NFIP.

Thus far, the industry has publicly maintained that once they have a chance to show how hard carriers worked to settle hundreds of thousands of claims under impossibly difficult circumstances, all of this outrage will fade away. But privately, many are very concerned that painful tales of woe by those whose claims were rejected because of non-compensable flooding will ultimately carry the day.