This in from Rep. Larry Taylor (soon to be Sen. Larry Taylor):
REP. LARRY TAYLOR RELEASES STARTLING
TWIA LITIGATION SUMMARY
- New Records Reveal Staggering $1.2 Billion Spent
On Hurricane Ike Litigated Claims; Excessive Costs Still Climbing -
FOR IMMEDIATE RELEASE
CONTACT: Matt Welch (512) 417-8084 cell; email Matt@horizonpublicaffairs.com
AUSTIN, TEXAS (October 29, 2012) – Since Hurricane Ike struck the Texas Gulf Coast over 4 years ago, the Texas Windstorm Insurance Association (TWIA) has paid out over $1.2 billion dollars on individually litigated claims related to the disaster. The information released today by Rep. Larry Taylor (R – Friendswood) reveals troubling legal settlement patterns and staggering litigation expenses on the part of TWIA. Rep. Taylor requested the information from the Texas Department of Insurance (TDI) in preparation for an upcoming hearing of the TWIA Legislative Oversight Board on November 1, 2012.
The information provided by TDI reveals an additional $1.2 billion dollars spent on Hurricane Ike litigated claims since the previously reported class action settlement for slab claims. Although this figure represents almost half of the total $2.5 billion in estimated losses, it is for only 10% of the 93,000 total claims. Rep. Taylor, the Co-Chairman of the Oversight Board, said, “September 13, 2012 marked the 4 year anniversary of Hurricane Ike, yet TWIA continues to pay out tens of millions of dollars and plaintiff attorneys continue to solicit additional lawsuits. Coastal residents deserve to know how their dollars are being spent. I intend to get answers at the upcoming hearing because this natural disaster has turned into a man-made disaster with serious repercussions.”
To add insult to injury, on October 26, 2012, TWIA management announced a reduction in their expected contribution to the reserve fund by $100 million dollars due to ongoing lawsuits associated with Hurricane Ike. This announcement leaves TWIA with only $25 million dollars to be deposited into the Association’s reserve fund to pay future catastrophic claims.
The records also reveal a troubling and problematic settlement pattern between TWIA and the plaintiff attorneys involved in the litigation. There are extremely high settlement amounts above and beyond prior payouts made by TWIA for claims resulting in litigation. For example, TWIA paid out on average 7.2 % of all policy limits on the initial claims by policyholders. But, after litigation, TWIA paid out an additional 43% of policy limits on average. This represents a combined average payout of 50% of policy limits on the 10% of claims that were litigated. In addition, TWIA has spent approximately $70 million dollars on defense costs since 2008, an additional $69 million on expense costs and $1.3 million on mediation related to Hurricane Ike settlements.
A summary of the Top 10 Plaintiff Law Firms handling TWIA litigation reveals an astounding settlement payout over $600 million dollars. There are over 300 plaintiff law firms with Hurricane Ike litigation claims in Texas, but a small cadre of 10 law firms has handled over 74% of TWIA litigated claims. These firms are on track to handle over 800 additional claims in the coming months. Last session, the Texas Legislature passed legislation to reform the claims settlement process and litigation practices of TWIA. However, the legislation affects future events, not past events like Hurricane Ike.
Rep. Taylor added, “the bleeding of TWIA ratepayers has got to stop and it’s time TWIA management explain exactly how they’ve been running their business since Hurricane Ike devastated Texas. The payout patterns don’t make sense, the exorbitant costs are atrocious and the abuse of the public trust is at an end.”
Looks like there might be areas still needing tort reform. This chart from the link above caught my eye:
Looks like Rep. Craig Eiland has been busy while living in Austin. Sued and settled $40,000,000 worth of claims. So far. Remember this question and answer?
15. Should a person who has oversight responsibilities in the legislature be taking TWIA legal cases or handling TWIA policies?
Eiland: The TWIA Oversight Committee was created in 2009 by House Bill 4409. I have never been on the TWIA Oversight Committee, I specifically asked not to be put on that Committee. I accepted my first Ike case for a local respected businessman after the 2009 session was completed. Because of TWIA and other insurance companies’ treatment of storm victims I represented may people and business for Hurricane Ike damage. When I returned to the legislature I asked for and received a favorable House ethics opinion before voting on any property insurance issues. Doctors, farmers and CPAs and even insurance agents and lawyers tend to be on committees where their expertise is best utilized.
Heh, “expertise best utilized”. Apparently utilizing it well. No wonder he can afford a jet to hop down to Galveston every once in a while.
There is a choice in House District 23, Wayne Faircloth. A much, much better choice.