Wednesday, June 8, 2011

Texas lawmakers OK changes to hurricane insurance

From the Chron, an example of a Texas Legislative Committee in action:

AUSTIN — Lawmakers approved big changes Tuesday to the insurance authority that covers coastal residents in case of a hurricane.

The House Insurance Committee passed a bill overhauling the Texas Windstorm Insurance Association. Gov. Rick Perry put the matter on the special session's agenda, saying he hoped it would be passed before another hurricane hits. The bill now goes to the full House for consideration and if approved, on to the Senate.

The association is a nonprofit, state-supervised insurer of last resort for people who can't get private property insurance. The organization is subsidized with mandatory dues from for-profit insurance companies.

Following Hurricane Rita, there were numerous allegations of collusion between claims adjusters and the association. More than 1,900 policyholders sued the association for failing to pay for legitimate damages. The Texas Department of Insurance placed the association under administrative oversight in February.

The most controversial part of the bill would limit how much a property owner could win in punitive damages if the nonprofit association doesn't fulfill its obligation for coverage. The proposed bill would eliminate claims for punitive damages. Trial attorneys and advocacy groups have opposed that provision
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