State Sen. Larry Taylor (R-Friendswood).
State Sen. Larry Taylor (R-Friendswood) has authored Senate Bill 1628, also known as the, “Insurance Immunity Act,” which will be eligible to be heard on the Senate floor in Austin Wednesday (April 29).
This bill has been under fire by some state “watchdog” groups, such as Texas Watch, that claim “millions of individual and commercial insurance policies across Texas will become nearly worthless overnight.”
SB 1628 contains language that would halt trial lawyers and public adjusters from contacting victims of natural disasters, such as Hurricane Ike, to offer to file lawsuits against insurance companies.
Dallas Morning News Watchdog Dave Lieber and Texas Watch agree that the bill would strip current laws that prevent insurers from using deceptive practices to delay and deny legitimate claims. They also claim that the bill would remove the penalties that insurance companies must pay when they’re caught using deceptive practices.
According to Texas Watch, “Currently, when property owners file weather-related claims, their insurance companies are obligated to: Pay within 15 days (or pay 18% interest and possible penalties; and handle most legal disputes in state courts.
“If Senate Bill 1628 passes, insurance companies will be allowed to: Pay claims whenever they see fit (interest and bad faith penalties will be eliminated); handle most legal disputes in federal courts (the bill gives immunity to Texas-based adjusters and since most insurance companies are based in other states, the cases go to federal courts); and file criminal charges against policy holders who submit what the insurance company considers an inflated claim (the policy holder, who is not an expert, would simply be signing off on an estimate provided by an adjuster, roofer, contractor or engineer).”
Texas Watch also states that the passing of SB 1628 would directly benefit Sen. Taylor himself, as he owns Truman Taylor Insurance Agency in Friendswood.
Alex Winslow, the Executive Director of Texas Watch, stated: “The bill could grant full legal immunity to adjusters, agents and other insurance-company representatives, even when they have made intentional misrepresentations to policyholders.
“That means insurance employees will be free to lie and cheat without fear of legal action. In other words, when it comes to protecting Texans from big insurance, your state’s taxpayer-funded courtroom doors will be closed.”
In rebuttal, Sen. Taylor’s office released this statement Wednesday (April 29):
“There have been many untruths and blatant lies regarding the intent of my consumer protection bill, SB 1628. This bill will eliminate catastrophic weather lawsuit abuse while assuring homeowners’ right to receive fair and timely claims payments from insurers. On top of the claims payments, SB 1628 enables homeowners to collect 18% penalty interest, pre-judgment interest and attorney fees. In fact, SB 1628 preserves every penalty entitled to policyholders under current law and only enhances regulatory authorities’ ability to crack down on bad actors in the legal and insurance industries.
“These changes are being falsely characterized by trial lawyer front groups like Texas Watch as somehow ‘stripping’ policy holders of their right to timely payments or even all of their homeowner’s insurance benefits. Texas Watch consistently distorts the truth and I will not stand by and let their factually challenged statements go unanswered.
“Texas Watch has long tried to deceive the public by portraying themselves as a pro-consumer group, but according to their filing with the Texas Secretary of State, the seven-member board of Texas Watch is dominated by personal injury trial lawyers and their allies, including the longtime spokesman for the Texas Trial Lawyers Association (TTLA) Willie Chapman and Dallas trial lawyer D. Shawn Stevens. The Deputy Director of Texas Watch, Ware Wendall, is a personal injury trial lawyer. Distorting the intent of this bill and creating fear in policyholders protects trial lawyers’ businesses and wallets.
“Storm-chasing trial lawyers prowl storm devastated communities and manipulate the law for attorney fees. Some unscrupulous contractors, public adjusters, and case runners troll entire neighborhoods to solicit lawsuit clients. This unethical behavior makes millions of dollars off the backs of unaware consumers who see their deductibles and premiums rise after a weather catastrophe hits.
“These bad actors are the cause of the recent surge in lawsuits following hailstorms in Hidalgo County in 2012. There has been no increase in the frequency of neither hailstorms nor changes in insurance law. Over 30% of hail and windstorm claims have turned into lawsuits, with 80% or more of the lawsuits filed after the initial claim has been paid. Only 24 consumer complaints from Hidalgo County were filed through 2014 with the Texas Department of Insurance, reflecting the small number of actual legitimate consumer complaints regarding their carriers.
“SB 1628 stops trial lawyers from filing frivolous lawsuits following a weather catastrophe and strengthens homeowners’ rights. Policyholders deserve the lowest insurance premiums possible and to have their claims handled promptly and fairly. These are the facts of SB 1628. Don’t be fooled by Texas Watch and their trial lawyer fiction.”
To read the actual text of SB 1628, visit https://legiscan.com/TX/text/SB1628/2015.