Earlier I wrote a post about the Texas Windstorm Insurance Association (“TWIA”) considering raising rates by 5%. Well, TWIA made it official: rates will go up 5% next year for thousands of homeowners covered by the state’s storm insurer of last resort.
On Friday, July 15, 2011, the Texas Department of Insurance Commissioner issued a ruling stating that the Texas Windstorm Insurance Association (TWIA) had “violated the insurance laws of the State of Texas….” Specifically, the Texas Department of Insurance Commissioner found that TWIA violated state law by deceiving and taking advantage of TWIA policyholders after thousands of legitimate claims were denied or underpaid. The Commissioner concluded that “such conduct constitutes grounds for disciplinary action.”
Before the end of the last Texas legislative session, the Texas legislature ended their Texas Windstorm Insurance Association (TWIA) reform stalemate and passed a comprehensive reform bill it hopes will better prepare TWIA for future catastrophes. The bill was sent to the governor, but he has yet to sign it.
A special hearing has been set this Friday regarding Texas Windstorm Insurance Association (TWIA) Hurricane Ike litigation following TWIA being placed under administrative oversight. The Texas Department of Insurance has the power to place TWIA under its control during a time of crisis. Apparently, new information provided to the Department of Insurance lead to the finding that TWIA is in a condition hazardous to the public or to its policyholders.
Texas Judge Susan Criss signed an Order this morning approving the settlement of the slabbed cases from Hurricane Ike. She made the following findings:
4. The Court finds that the Settlement was negotiated at arm’s length by Plaintiffs’ counsel and TWIA’s counsel. The Settlement is reasonable in light of the uncertainty as to whether the Class Members could prevail on their causes of action against TWIA, the risks and cost of litigation, and the value of claims foregone. The terms and conditions of Settlement are no less favorable to the Class Members than comparable arms-length terms and conditions that would have been agreed to by unrelated parties under similar circumstances.
Dan Luby, of the Florida Insurance News, does a fantastic job tracking down timely articles involving insurance. He linked Taylor Heads to Supreme Court to Get TWIA Documents, which involves a Texas legislator trying to obtain confidential resolutions and settlement information from the Texas Windstorm Insurance Association (TWIA).
The Galveston Island and Bolivar Peninsula slab cases are settling. There was an agreement between the Texas attorneys that nothing would come out in the press until the clients signed the agreements. Since even the Texas Windstorm Insurance Association (TWIA) participated with a press release, I assume that the gentlemen’s confidentiality agreement to wait on telling everybody publicly that a settlement has been reached, even before clients have signed the releases, no longer applies. The vast majority of my clients have only received letters from our firm, and I am awaiting final figures from TWIA so that we can consummate the deal. I hope everybody is not optimistically jumping the gun.
One of my TWIA slab case clients was very happy about the proposed resolution of her claim. Her tone changed when she mentioned that TWIA raising rates five percent. I have often felt that our elected leaders are in a no-win situation when the people electing them to office hold a noose over their neck when it comes to government sponsored insurance. Voters want lower rates, even if that means the government charges absurdly low rates and unfairly competes with private enterprise.
The Texas hurricane insurance coverage disputes caused by Hurricane Dolly and Hurricane Ike are fully engaged. Texas’ two year statutes of limitation are approaching. New law suits are being filed, pending lawsuits are being set for trial, settlement conferences are causing great frustration, and the discovery battles between insurance counsel and policyholder counsel are considerable and contentious. Sadly, this is a pretty normal state of affairs on a two year anniversary following a major catastrophe.