NU Online News Service, June 2, 1:25 p.m.EDT

The Texas legislature passed legislation reauthorizing the TexasDepartment of Insurance (TDI), but did not act on separatelegislation to reform the state's last-resort wind insurer, theTexas Windstorm Insurance Association (TWIA).

Joe Woods, vice president, state government relations for theProperty Casualty Insurers Association of America (PCI), says theTDI, like all state agencies, has to go through a sunset reviewprocess every 12 years. Two years ago, he explains, areauthorization bill got caught up in a last-week filibuster anddied. The legislature approved a two-year extension, and theprogram was reviewed again this year.

Woods calls the legislation a "pretty bare-bones reconstitutionof TDI." One of the few changes, he says, was to clarify whatadditional information the department can ask for when insurersfile rates. Texas, Woods says, is a file-and-use state but thedepartment uses its authority similar to a prior approvalsystem.

Woods says the department would not issue flat out rejections offiled rates, but would haggle with insurers to get adjustments tothe filings.

In the reauthorization bill, the legislature put in a 30-daydeadline for the department to review filed rates for auto andhomeowners insurance. If necessary, the department may seek amaximum 30-day extension.

Previously, Woods says, rates could have been filed for twoyears before the department would begin to ask for additionalinformation.

Separately, the legislation did not act on TWIA reforms, whichWoods says has become a game of "multi-dimensional chess" betweeninland interests, coastal interests, lawyers and the insuranceindustry.

He says that two years after Hurricane Ike in 2008, TWIA wasstill receiving claims. Additionally, attorneys were bringinglawsuits against TWIA for unfair claim settlement practices. Thelawsuits would seek treble damages, attorney fees and interest,Woods says, noting that the lawsuits were treating TWIA as aninsurance company.

Woods notes that TWIA is not an insurance company and has noprofit motive. "They don't have a dog in the fight other than toprocess claims," he notes.

The reform legislation would have addressed bothissues—stipulating that claims must be filed within one year of thedate of loss, and limiting lawsuits that can be brought againstTWIA.

Woods says the bill passed the House and later passed the Senatein a "watered-down form," but ultimately legislators were unable toreach an agreement on final legislation.

A 30-day special session began two days ago to address Medicaidand school finance, Woods says, and the industry is hoping thegovernor will add TWIA reform to the agenda. If it is not added,reforms could not be passed for another two years.