Texas lawmakers were unable to come to terms on an overhaul of the state-backed insurer of last resort for wind and hail along the Texas coast, so they’ll be returning to Austin in July to try again. Their failure to deal with school finance, however, means they’ll have to push through on a first special session beginning today.
The last day of the regular legislative session was May 30.
One hold up on the Texas Windstorm Insurance Association reform bill is whether policy holders whose claims are denied can win punitive damages if they challenge the decision and win.
The Senate plan would allow punitive damages. Lawyers lobbying for the bill want the rate at 18 percent per year, but Texas Gov. Rick Perry said he “won’t be party” to trial lawyers using the quasi-agency like an ATM.
“It’s all about the money,” said Republican Sen. John Carona, one of the lead negotiators on the measure.
The windstorm association is a quasi-government agency that is the primary property insurer for residents and businesses in 14 coastal counties. It was a relatively obscure agency until Hurricane Rita lashed the Texas coast in 2005, and the fund began running out of money following Hurricane Ike in 2008.
Rep. John Smithee, R-Amarillo, introduced House Bill 272, which would change the rules on filing lawsuits against the agency in order to save it money.
Smithee has said the Senate-added amendments to his bill are unacceptable.
The reform bill is important to Perry, who has made lawsuit reform a major issue. Smithee said Perry told him he would call a special session on July 15 if the bill did not pass.
Under the proposed bill, an insured person could only claim an amount limited to the maximum amount of the policy, with no opportunity to win punitive damages against the association if the matter ends in a lawsuit.
Smithee said the Senate version was not as strict on banning punitive damages if an insured party sued the association.
Was this article valuable?
Here are more articles you may enjoy.
Project 2025 Plan to End NFIP Welcomed by Some, Rejected by Others in Insurance 
Progressive Q2 Net Income Skyrockets Over 320% 
Marsh McLennan Agency to Acquire The Horton Group 
Hurricane Beryl: Insurers See Minimal Impact, Brace for Active Season 
