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Lawmakers Optimistic About a TWIA Compromise

Photo by Bob Daemmrich, Texas Tribune
Sen. John Carona, R-Dallas, speaks to the Senate after being appointed chair of the conference committee on the Texas Windstorm Insurance Assn. (TWIA) bill on June 27, 2011.

State legislators say they've reached a compromise on reform of the Texas Windstorm Insurance Association, potentially averting a second special session this summer.

Absent a deal, Gov. Rick Perry said last week that he would call lawmakers back into session to work out their differences on TWIA, which acts as an insurer of last resort on hurricane and other windstorm claims.

TWIA has become a battlefield for tort reformers and trial lawyers, after it botched hurricane claims and found itself paying hefty fees to lawyers who sued on behalf of people whose initial claims didn't cover what their policies promised.

The compromise, worked out by Rep. John Smithee, R-Amarillo, and Sen. John Carona, R-Dallas, over the weekend, would clarify what TWIA has to do when it settles claims. It also would limit what lawyers can collect when suing over mishandled and inadequate claim settlements.

"I think we've reached kind of a delicate balance," Smithee said. The House and Senate both appointed conferees to settle the differences in their two bills. A short while after the House negotiators were named, Smithee said he had the signatures he needs. He was optimistic about the Senate as well.

"We've identified a lot of problems in how TWIA operates, and hopefully we've solved some of those, to make the whole operation more transparent, to make it more ethical in what it does, and also to simplify the claims process to some extent," Smithee said. "I would say the vast majority of these claims will be solved without any litigation through the appraisal process.

"We're going to be litigating a very few of these cases and we'll have some predictable limit on what a plaintiff and their lawyer can recover, so we can kind of allocate our resources a little better and pay the actual claims that we have," Smithee said.

Carona told reporters he's optimistic about an agreement.

The new rules won't apply to cases already on file when the bill takes effect — probably in October — if lawmakers approve the deal.

Perry and  Texans for Lawsuit Reform have made a priority of the bill. The Texas Trial Lawyers Association has been on the other side. And there's a personal edge to it, too; prominent plaintiffs' attorney Steve Mostyn has made a specialty of TWIA claims and also happens to be the Texas Democrat who spent the most money trying to get Perry defeated in the 2010 election cycle.

TTLA hasn't taken a position on the compromise yet; someone familiar with them says they've got "serious concerns," but officially, they're still looking at it.