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The Texas Lawbook: Business leaders, lawyers and lobbyists line up against insurance bill

Business leaders, lawyers and lobbyists line up against insurance bill May 22, 2015 The Texas Lawbook, Mark Curriden Texas legislators are on the verge of passing a new law that critics say would encourage out-of-state insurance companies to sue Texas property owners for making legitimate coverage claims for damage caused by severe weather, including hail. The legislation, identified as Senate Bill 1628, also would place expensive and time-consuming burdens on business and individual property owners who want to legally challenge their insurance carriers for denying their claims, according to legal experts representing scores of the largest companies in Texas. Business leaders, lawyers and lobbyists, including those representing Trammell Crow Residential, La Quinta Inn, Sovereign Bank and dozens of other companies, flooded state legislators with letters, emails and phone calls this week in an effort to kill the proposed law, which is expected to come up for a final vote before the legislative session ends Tuesday. David Mims, senior vice president of Dallas-based La Quinta Inns, wrote a letter to House Speaker Joe Straus saying that the legislation “will negatively impact every type of business that attempts to have legitimate business claims paid by insurance companies.” “A lot of people are suddenly realizing that this is a crazy, wacky bill that benefits out-of-state insurance companies at the expense of Texas businesses and homeowners,” said Robert Ryan, the deputy general counsel of Houston-based Stallion Oil Field Services. Supporters of the legislation, led by the group Texans for Lawsuit Reform, describe the measure as “pro-consumer” by helping keep insurance premiums less expensive. They say the law is needed to stop trial lawyers from filing so many lawsuits in South Texas over hail damage to their homes. “There’s a lot of misinformation going around about this legislation — a lot of misinformation,” said Sherry Sylvester, a spokeswoman for Texans for Lawsuit Reform. “It does not take away your right to sue. It does not cap your damages.” Business leaders dispute that the proposed law is pro-consumer and argue that it goes too far. “This legislation would hurt our company and the thousands of employees who work for us,” said Kimberly Lubel, the CEO of San Antonio-based CST Brands, which operates more than 650 Corner Store convenience stores in Texas. “I strongly oppose any legislation that gives the insurance industry more leverage than they already have over businesses or individuals,” said Lubel, who formerly was the general counsel at Valero Energy. The proposed law,... Read More

Waco Tribune-Herald editorial: Insurance industry shouldn’t have special protections that everyday Texans, businesses lack

EDITORIAL: Insurance industry shouldn’t have special protections that everyday Texans, businesses lack May 21, 2015 Waco Tribune-Herald The Texas AARP director calls it “the worst consumer bill in living memory.” A Texas consumer watchdog group dubs it the “Insurance Immunity Act.” We brand it the most crooked bill of the 84th Texas Legislature — and given Central Texans have been living under the threat of hail, rain and high winds for much of this month, more of us ought to be paying close attention to this sorry, self-serving legislation. Fortunately for state leaders, they have constituents so whipped up about such things as Shariah law, same-sex marriage and Navy SEALs and Green Berets confiscating our guns come summer that everyday Texans — those who expect insurance companies to cover claims when their roofs suffer wind, hail or rain damage — may find they’ve been cleverly outmaneuvered by elected officials. Senate Bill 1628 would allow insurance companies to significantly reduce their chances of facing lawsuits, even if businesses and homeowners believe they’ve been cheated of valid property damage claims. Not only would it hinder those who feel they’ve been shafted on legitimate claims (and when they’re most vulnerable), it penalizes possibly innocent mistakes by the consumer while creating an uphill legal battle to hold professional insurance company personnel accountable. Oh, did we mention the bill’s author, Sen. Larry Taylor, is an insurance agent? Surely no conflict of interest there. Taylor says all this will lower premiums and end “catastrophic weather lawsuit abuse.” That’s a worthy enough goal, given the murky world of fly-by-night roofers and lawyers who press excessive claims in the wake of damaging storms. But this legislation oversteps its effort at needed reform, safeguarding the insurance industry to such a degree it places policyholders among the powerless and the guilty. And, frankly, we’re getting a little tired of a political party intent on making it harder and harder for ordinary citizens to pursue legal redress even as it sues the federal government with great abandon and glee. Republicans are right to press legitimate constitutional issues in court. So why is it wrong for homeowners and businesses to do the same about basic rights? As an Amarillo businessman sufficiently burned by his insurance company wrote in protesting this bill: “I want all of my rights, including those to fight in state court, and to punish insurance companies that have treated others the way I have been treated.” Greatest irony:... Read More

Austin American-Statesman: Insurance bill once backed by industry now seen as flawed

Insurance bill once backed by industry now seen as flawed May 20, 2015 Austin American-Statesman, Tim Eaton Support is eroding quickly in the Legislature for a bill that was originally drafted to curb insurance-related lawsuits after hail storms and other weather disasters. Many insurance companies and tort reformers saw an early version ofSenate Bill 1628 by state Sen. Larry Taylor, R-Friendswood, as a proposal they could get behind. But the bill has gone through so many changes since its introduction that even some of its most ardent supporters have flipped their positions, leaving only a few outliers along with Texans for Lawsuit Reform as the remaining advocates. Fred Bosse, a Texas official of the American Insurance Association, said the bill no longer addresses the insurance industry’s problems with the swelling rate of litigation over claims following weather events. The leaders of the insurance industry group, who originally came out in favor of Taylor’s version of the bill, now have no interest in seeing the current version reach the Texas House floor for a vote. “It seems that we have been regressing,” Bosse said. Insurers across the country normally see claims-related litigation on about 1 percent to 3 percent of all claims, but in Texas, some insurance companies are reporting as much as 35 percent of claims in litigation, Bosse said. Particularly troubling for some insurers is a provision on appraisals added by the bill’s sponsor in the House, state Rep. John Smithee, R-Amarillo — who said he made “significant changes” to prevent abuses, create a fair bill and allow affected consumers to rebuild their lives as quickly as possible following a covered loss. The appraisal process in the insurance realm is basically a way to resolve damage disputes, using an “umpire” to determine the value of insured property when there’s a disagreement between the insurer and the customer. Smithee’s change would allow insurers in an appraisal process to pay an extra 12 percent on a claim in exchange for quick resolution and to reduce the likelihood of litigation. Beaman Floyd, the director of Texas Coalition for Affordable Insurance Solutions, thinks the added 12 percent could lead to more appraisals and overpayments because some customers might be inclined to push for appraisals with the hope of getting more cash, he said. But Floyd, who runs an organization of homeowner and automobile insurers, said he’s hopeful changes can be made before the looming end of the session. The proposed appraisal process... Read More

San Angelo Standard-Times: Bill that could make it harder to sue insurers advances

Bill that could make it harder to sue insurers advances May 19, 2015 San Angelo Standard-Times, Matthew Waller AUSTIN — A controversial insurance bill — which supporters say protects insurers from over-suing after events such as hail storms — is advancing through the Legislature as the end of the session fast approaches. Beaman Floyd, executive director of the Texas Coalition for Affordable Insurance Solutions, has been supportive of the bill and its intent to stamp out too many frivolous lawsuits. However, Floyd said, “We do have some concerns about the current iteration of the bill,” Senate Bill 1628, from Sen. Larry Taylor, R-Friendswood. For example, he believes certain individual appraisers should have more protection from getting sued individually, instead directing suits more toward the company. The bill was voted on in a committee meeting that was not recorded on camera, like the vast amount of committee meetings, and got a 6-3 vote in the House Insurance Committee. According to insurance industry reports, about 1 percent of insurance cases traditionally have gone to court, Taylor has said. But recently in the wake of the hail storms, that percentage went to about 30 percent. He argued that people are soliciting for lawsuits, signing homeowners up simply by asking, “Were you affected by hail?” After two storms in Hidalgo County in 2012, 22 percent of the claims became lawsuits, the Texas Coalition for Affordable Insurance has noted. Attorney Ernest Martin Jr. of international law firm Haynes and Boone wrote a letter to the Texas Senate warning senators of “unintended consequences.” “I write to express my deep concern and opposition to Senate Bill 1628. While I appreciate the sponsor’s intent in introducing this bill, namely, to address perceived abuses in pursuing hailstorm claims, the bill goes way beyond this intent and instead has many unintended consequences which will significantly harm Texas business interests.” Policyholders might largely lose out on recovering certain costs and legal damages, detractors have noted. Current law includes an 18 percent interest payment against insurance companies for underpaying claims, but the bill might let the companies avoid the penalty. The AARP, an organization that advocates for retirees, planned to protest the bill with phone calls and social media postings, according to a release. The group also is concerned about negating the 18 percent interest payment by only making part of it payable. “It’s wrong to punish honest people who’ve already been victimized by weather-related catastrophes … again,” AARP Texas state... Read More

KCBD Lubbock: New senate bill aims to end weather-related insurance lawsuits

KCBD NewsChannel 11... Read More

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