in Houston, Texas
Windstorm reform bill stalls in Senate committee; TWIA bill product of too many competing interests, Sen. John Carona says
Monday, Jun 20, 2011, 12:04PM CST
By Mark Lisheron
Capitol dome

A disgruntled Senate Business and Commerce Committee, its chairman apologizing repeatedly for an inadequate piece of legislation, refused to vote on a Texas Windstorm Insurance Association reform bill Monday morning.

Sen. John Carona, R-Dallas, told his committee House Bill 3, which would curb the ability of more than 250,000 windstorm insurance policyholders to sue for noncompliance, was the product of too many competing interests.

“Each group,” Carona said, “wants more than what is reasonable.”

Carona said the compromise bill pleased neither the groups seeking to curb lawsuits against the association, a quasi-government agency, nor the trial lawyers concerned the bill abridges a citizen’s right to a day in court if the association breaches its insurance policy agreements.

He suggested a nonpartisan group of senators from the committee appeal to Lt. Gov. David Dewhurst for some direction in producing a bill satisfactory to the House and the Senate.

However, the House last week passed in HB 3 a bill that prevented a policyholder from collecting triple damages for losses that were a consequence of the association’s delay in settling a claim.

The House took a strong stand on lawsuits to blunt the exposure of the state to lawsuits, the cost of which would be shouldered in part by TWIA policyholders in rate increases. House reformers were alarmed at the many millions of dollars paid out by TWIA in damages after the thousands of claims filed after Hurricane Ike in 2008.

The compromise bill allowed for a policyholder to sue for double those consequential losses, but placed the burden of proof on the policyholder to prove the association’s breach of a policy was intentional.

Committee vice-chairman Sen. Chris Harris, R-Arlington, said the modified bill robbed those insured by TWIA of rights afforded regular insurance policyholders, something he couldn’t countenance.

Sen. Eddie Lucio Jr., D-Brownsville, called the bill “a political solution to a real problem. The collateral damage will be those of us on the coast insured by TWIA. This bill is a disservice to all coastal Texans.”

At the same time, there is a question about whether or not Sen. Troy Fraser, R-Horseshoe Bay, will get a hearing for a bill he filed late last week to abolish the agency.

Rep. John Smithee, R-Amarillo, author of HB 3, said he believed the House would not accept such a bill, even if the Senate were to approve it.
Contact Mark Lisheron at 512-299-2318 or or on Twitter at @marktxwatchdog.

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Photo of state Capitol dome by flickr user coffee is for closers, used via a Creative Commons license.
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