NU Online News Service, June 24, 2:25 p.m. EST
The fate of reform to the Texas Windstorm Insurance Association—and the summer plans of lawmakers—may be in the hands of two legislators working privately on a bill on which the state Senate and House can agree.
The Senate on June 22 passed its version of an earlier-accepted House measure to reform the manner in which policyholders file claims and lawsuits against TWIA, the state's insurer of last resort.
A bill to eventually do away with TWIA did not make it to a Senate committee.
Because they could not agree during the regular session, the legislature is working on TWIA in a special legislative session called by Gov. Rick Perry, who has issued a statement warning lawmakers that he'd call another special session if legislation doesn't reach his desk soon.
"Reforming TWIA is imperative to protecting Texans from the effects of devastating hurricane seasons," the governor says.
Much work is left do, says Joe Woods, assistant vice president and regional manager for the Property Casualty Insurers Association of America (PCI), because the Senate and House bills differ on the restrictions placed on the amount of damages policyholders can collect in lawsuits against TWIA, which is still receiving claims from Hurricane Ike in 2008.
"The House bill would not allow policyholders to seek punitive damages," explains Woods. "The Senate version is not as strong."
Currently, policyholders are permitted to sue TWIA for treble damages beyond actual damages. While the House bill eliminates this option, the Senate version retains the ability for policyholders to seek double damages, Woods continues.
The Senate did do away, as the House did, with an automatic 18 percent penalty on claims that are inappropriately discharged or delayed. The Senate kept the penalty in a bill it passed during the regular session.
"At least they moved together on that point," Woods says.
A conference committee where the House and Senate will try to agree on legislation will not meet until Monday, but Woods says Rep. John Smithee, R-Amarillo, and Sen. John Carona, R-Dallas—authors of the respective measures—are meeting now.
"We must pass legislation to adequately compensate TWIA policyholders without enriching trial lawyers or further undermining TWIA's financial stability," Perry says.
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