NU Online News Service, March 9, 12:47 p.m. EST

The Travis County district attorney in Texas is now involved in an investigation of the state's last-resort insurer, the Texas Windstorm Insurance Association (TWIA).

The Texas Department of Insurance (DOI) has placed TWIA under administrative oversight. DOI said its decision was based in part on information provided to it that suggests an outside claims adjuster was paid for work that was never done.

Gregg Cox, assistant district attorney, said the office was contacted by DOI to participate in an investigation. The Texas state auditor is also participating, he said.

Mr. Cox said the district attorney's office has a public integrity unit within the Insurance Fraud Division that has the authority to investigate anyone involved in the business of insurance.

Shortly after DOI made its announcement, TWIA's board of directors drafted a resolution to create a committee charged with finding a replacement for General Manager Jim Oliver.

Mr. Oliver said the decision to eventually replace him was not related to DOI's order. Leaving TWIA was something he was looking to do anyway, he said, and he will be involved in finding his replacement.

Another resolution by the TWIA board forbids future in-kind payments as part of severance packages. Lawmakers recently grilled Mr. Oliver about severance packages, worth a total of $160,000, given to Reggie Warren, former head of claims, and Bill Knarr, former catastrophe manager. One also received a pickup truck as part of the package.

Mr. Oliver said the severance packages were "completely justified" and were needed to ensure cooperation in future litigation involving TWIA, which has settled more than 3,000 claims but still has 2,000 left, including outstanding class actions.

If the actions of Mr. Warren or Mr. Knarr are deemed inappropriate or illegal after an investigation, a clause allows TWIA to stop paying the severance packages, Mr. Oliver said. Each resigned, he added, and the circumstances are protected by a confidentiality agreement.

Mr. Oliver said DOI has concerns about TWIA's settlement of slab claims and the payment of attorneys' fees. He said TWIA "never objected" to the release of documents to find out how much attorneys were paid in the claims resolution process. A temporary injunction, asked for by plaintiffs' attorney Steve Mostyn, who was involved in the claims, was lifted—an action that went to the courts when Rep. Larry Taylor, R-Friendswood, a Texas House member, requested the documents from TWIA.

"The [DOI] needs to satisfy itself and pass on its findings to the legislature," Mr. Oliver said. "We've always felt we have done our due diligence. This is a matter of perception versus reality."

Special Reports /

Travis County, Texas D.A. Involved In TWIA Investigation

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