in Houston, Texas

Head of Texas windstorm agency dismissed amid state takeover and fraud investigation of TWIA

Monday, Feb 28, 2011, 09:22PM CST
By Steve Miller
Galveston after Hurricane Ike

The top leader of Texas' state-operated property insurance agency has been dismissed amid a fraud investigation of the insurer by state and local authorities.

 

Jim Oliver, general manager of the Texas Windstorm Insurance Association, will remain in his position and assist in the search for his replacement, which is to be completed "as quickly as possible," according to a resolution passed by the TWIA board at an emergency meeting Monday.

 

The agency has been in turmoil, coming under scrutiny by state lawmakers following Texas Watchdog's reporting on severance packages awarded by the agency and on legislators who have benefited from legal payouts by TWIA to resolve Hurricane Ike claims.

 

All but 25 minutes of Monday's four-and-a-half-hour meeting was spent in executive session, as the board labored under the announcement that the agency has been placed under administrative oversight by the Texas Department of Insurance. For the first three hours of the closed session, Oliver was in the room, but he left as the panel discussed his future. He was present when it was announced he would be replaced but did not comment.

 

In addition to the replacement of Oliver, the board announced it will form a committee "composed of board members to conduct or hire a consultant to conduct an investigation of claims handling practices of TWIA," said attorney Mike Perkins, of Sneed, Vine & Perry, outside counsel for TWIA.  

Additionally, the board decreed that there will no longer be in-kind payments made to employees as part of a severance package. This stems from the revelation in a Texas Watchdog story that a fired vice president, Reggie Warren, was given a 2010 Ford pickup truck in addition to $114,000 as his severance.

 

As the board decided on new policy, agents from the Department of Insurance worked at TWIA headquarters in Austin, examining records that may further its claim that the agency is riddled with serious problems.

 

The Department of Insurance decided to take over after concluding that TWIA management was not up to the job, according to a letter to Oliver:

The Texas Windstorm Insurance Association is in a condition that makes its continuation in business hazardous to the public or to its policyholders, as it appears that its management does not have the experience, competence, or trustworthiness to operate TWIA in a safe and sound manner. ... TWIA has failed to adequately address issues identified through the recent financial examination and subsequent financial analysis indicating a lack of adequate controls over accounting, personnel, and material decisions affecting day-to-day operations, as well as communications with staff, the board of directors and the Department.

Among the department's findings: TWIA paid outside claims adjusters for work that was not performed, and TWIA was aware of this and failed to report it to the appropriate state fraud unit. The finding prompted the state Insurance Department officials to refer some of their findings to the Travis County District Attorney’s office regarding possible fraud charges.

 

Today's meeting was fallout from last week’s legislative hearing before the House Insurance Committee over questionable actions at TWIA, including the murky circumstances regarding the firing of Warren and Bill Knarr, another high-ranking claims employee.

 

“Jim Oliver testified for two hours and faced harsh criticism,” TWIA board chairman Garry Kaufman said in a brief statement at today’s meeting. “Less than 24 hours later, TDI was coming to the commission to begin a targeted examination of TWIA regarding the employment of two employees, Reggie Warren and Bill Knarr.”

 

Warren and Knarr were fired at the end of December, according to committee member Craig Eiland, although Oliver has maintained they left voluntarily.

 

Warren received severance of the pickup truck and $114,000, while Knarr got $47,000, records obtained by Texas Watchdog show.

 

At last week's hearing, Oliver was asked about the circumstances of the firings, but claimed he could not discuss it because of a “confidentiality agreement” that was signed by both parties. He said the agreement was made in case the testimony of either employee would be needed down the road. TWIA is embroiled in numerous lawsuits regarding claims related to Hurricane Ike.

 

“When I was reviewing the issues that ultimately resulted in these two employees no longer working with TWIA, I sat down with claims attorneys and asked what would be the consequences of terminating these employees concerning ongoing litigation,” Oliver told the committee. “In discussing that, it was clear I needed to take the action that I took. However, it was also clear that we needed the cooperation of these two in the event that we needed them for depositions, trial and, in Mr. Warren's case, on policy issues he may have been involved with during Hurricane Ike and Dolly.”

 

Oliver said the truck and payments to the departed employees were “not uncommon" and overall, the payments and the confidentiality agreement were "the correct action."

 

Also in that committee hearing, Texas Insurance Commissioner Mike Geeslin testified about an assessment his department conducted of TWIA's operations 2006 through 2008. The department found the agency had numerous problems.

 

The report cited problems with personnel management documentation, poorly kept board minutes, mismanaged oversight of Oliver’s expenditures, failure to maintain a required log of claimant complaints, and a disaster recovery program that failed to outline the responsibilities of senior management.

Texas Watchdog began its reporting on TWIA late last year with a story on a $25,000 campaign donation from Democratic mega-donor and plaintiff's attorney Steve Mostyn's firm to state Rep. Todd Hunter, R-Corpus Christi, who mediated a slew of lawsuits filed against TWIA for Ike damage. The donation was recorded within days of Hunter being chosen as mediator, Texas Watchdog has found.

Hunter has said the donation "had nothing to do with the mediation."

Public records pointed to the firings of Warren and Knarr and their severance deals.

Texas Watchdog has also reported on the more than $620,000 in fees that Eiland, who sits on the House Insurance Committee, said he received from plaintiffs in the Ike case that Hunter mediated. Eiland has said his fees from TWIA-insured homeowners have no effect on his ability to vote fairly and impartially on measures affecting the agency.
 

***

Contact Steve Miller at 832-303-9420 or stevemiller@texaswatchdog.org.


Keep up with all the latest news from Texas Watchdog. Fan our page on Facebook, follow us on Twitter and Scribd, and fan us on YouTube. Join our network on de.licio.us, and put our RSS feed in your newsreader. We're also on MySpaceDiggFriendFeed, NewsVine and tumblr.


Photo of Galveston following Hurricane Ike by flickr user simminch, used via a Creative Commons license.

Comments
Be the first to post a comment.
Video
KTRK: On Big Screens for Billionaires, Comptroller Susan Combs Silent
Related Blogs and Media
Official planning to reduce pretrial detention While attention nationally has been focused on creative solutions to pretrial detention at Rikers Island, a number of advocates I know have...
Update:2 hours 11 min
Grits for Breakfast
JUNE 30 / No. 99 is No. 29 FORBES Magazine ranks J.J. Watt as the world's 29th highest-paid athlete over the past twelve months at $27.9 million total -- $20.9...
Update:6 hours 56 min
Unca Darrell
Tiger’s Renovation of Blaketree National into Bluejack National Nears Completion
Update:7 hours 38 min
Houston's Clear Thinkers
Bob Allen diagnosed with cancer Bob Allen announces he's ready to beat his cancer diagnoses - will take extended leave from KHOU 11 (function(d, s, id) { var js, fjs =...
Update:15 hours 26 min
Mike McGuff
Comment of the Day: Where’s Our Memorial Park Bypass? “This ramp will now allow more traffic to use Shepherd as an alternate to the freeway system. Thus creating longer delays for those...
Update:15 hours 39 min
Swamplot
Comment of the Day Runner-Up: Zoning Wouldn’t Have Kept the Sprawl Away “It’s always frustrating when I hear Houston’s sprawl and prevalence of strip malls blamed on our lack of zoning. You can blame...
Update:16 hours 40 min
Swamplot
The New Tiny, Ultra-Mod Police Memorial Police Station on Memorial Dr. Here’s the just-completed 250-sq.-ft. Memorial guard post recently completed in Buffalo Bayou Park. It’s right by that spot...
Update:17 hours 40 min
Swamplot
Buyer of Chronicle Complex Downtown Not Expected To Crush It Just Yet The deal could still fall through, cautions Ralph Bivins, but real estate development firm Hines is in the middle of negotiating a...
Update:19 hours 25 min
Swamplot
Jonathan Hansen – Don’t Raise Houston’s Minimum Wage From the InBox:   This is the first in a series of white papers I will be releasing on what I believe to be important issues...
Update:19 hours 50 min
Big Jolly Politics
Daily Demolition Report: Stomping Saint Augustine Swamplot’s Daily Demolition Report lists buildings that received City of Houston demolition permits the previous weekday. Demolishing...
Update:21 hours 10 min
Swamplot
Tweets
Karen Townsend | 2 years 11 months
"Patrick F. Kennedy is a career foreign service officer" - http://t.co/GOrCe0IS
Peter Corbett ✈ | 2 years 11 months
I'm at McCarran International Airport (LAS) w/ @almacy http://t.co/KvmId07i
KERA Public Media | 2 years 11 months
TONIGHT at 7pm on KERA TV: Presidential Debate: Learn more at PBS NewsHour. http://t.co/Z9kYdun8
PBS MediaShift | 2 years 11 months
Tech Snafus Make Bill O'Reilly/Jon Stewart 'Rumble' More of a Stumble http://t.co/4OfeBlrG (@kegill | @pbsmediashift) #rumble2012
Will Sullivan | 2 years 11 months
Great addition, been burned too much by bad subs. "Google Play Announces Free Trials For In-App Subscription Services" http://t.co/TOLgRVak
TxDOT | 2 years 11 months
I-35W/North Tarrant Express #constantcontact http://t.co/QDzrQumu
keyetv | 2 years 11 months
Serial shotgun robbers suspects arrested. http://t.co/ka8T4U9B
Karen Townsend | 2 years 11 months
Aren't State Dept career people suppose to be non-partisan? Not the political appointees, the career people. #Libya
© 2015 TEXAS WATCHDOG and USELABS. All Rights Reserved. Terms of Use and Privacy Statement