Texas Windstorm Insurance Association Crying “Help”

The Texas Windstorm Insurance Association, has found itself in an unfortunate position. The position is a creation of their own actions. Those actions were actions whereby they refused to pay proper claims to policyholders who suffered damages because of the hurricanes, Ike, Dolly, and Rita.

TWIA is crying “help” because they are afraid they are going to be punished for not properly paying claims to their policyholders. They are asking that they be immune from paying penalties, policyholder attorneys’ fees, and other expenses coming out of litigation that resulted from their conduct.

The windstorm association is a state-created insurer and is claiming that because they are an instrument of government that they should have immunity. Lawyers for the policyholders say that TWIA is effectively a private company, and that immunity would effect the over 900 lawsuits pending against TWIA.

The Texas Department of Insurance has administrative control of TWIA. Even though TWIA was created by the government, it is privately run.

The full story can be found in the Houston Chronicle. The Houston Chronicle reports that the Texas Attorney General has ruled the association is subject to the Public Information Act because it was created by lawmakers and is accountable to the State Insurance Commissioner.

The importance of this case lies in whether or not the TWIA can get away with just paying what they should have paid in the beginning to policyholders for their claims, or are they subject also having to pay penalties, interest, and attorneys’ fees. To only have to pay the original amount of the claim effectively “cheats” the policyholders since the actions of TWIA forced the policyholders to have to live with the loss and occur court costs and attorneys’ fees.