in Houston, Texas
Compromise TWIA bill aims to eliminate as much litigation as possible, sponsor says
Monday, Jun 27, 2011, 05:25PM CST
By Mark Lisheron

House and Senate conferees have a compromise Texas Windstorm Insurance Association reform bill making it harder for a damage claim to get into court without stripping policyholders of their legal recourse.

Rep. John Smithee, chairman of the House Insurance Committee, said Senate Bill 3 could be heard and voted on in both chambers as early as late afternoon Tuesday. Smithee said he has been given indications by staff that Gov. Rick Perry would sign the compromise bill should it be passed.

Perry was adamant that a TWIA bill be passed in this special session and threatened to call legislators back to Austin for a second special session if they failed in the first. With some give and take on the most intractable issues, Smithee said he was confident no second special session would be necessary.

Smithee said he spent much of Friday alone with Sen. John Carona, author of SB 3, working through the lawsuit questions that had prevented the House and Senate from agreeing to a reform bill.

The House version of the TWIA bill leaned heavily on curbing how much money policyholders stood to collect if they sued the association for breach of their policies. The Senate balked at the tougher restrictions, stranding the bill in the regular session.

Smithee said conferees from both chambers agreed to support the creation of expert panels to oversee the settlement of disputed windstorm policy claims. The bill changes the damage appraisal process to make those appraisals binding, Smithee said.

“Our goal was to eliminate as much litigation in the process as possible,” he said.

While a policyholder may still go to court to get his settlement, the most he would be entitled to are double damages, rather than the triple damages in current state law. The compromise would also remove the 18 percent penalty the association is now required to pay for the late payment of claims.

The new bill brings into sharp focus the grounds for a policyholder to sue the association, Smithee said. The policyholder would be required to prove the association intentionally violated those guidelines when failing to pay a claim, he said.

“I think we’ve been able to give TWIA an incentive to pay those claims in a timely way,” Smithee said. “There is no excuse not to do it.”
Contact Mark Lisheron at 512-299-2318 or or on Twitter at @marktxwatchdog.

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