Article in Insurance Journal
February 28, 2011
The Texas Department of Insurance has informed the director of the state’s property insurance company of last resort for wind in the state’s coastal counties that it is placing the organization under TDI’s administrative oversight.
In a Feb. 28, 2011, letter to Texas Windstorm Insurance Association General Manager Jim Oliver, Texas Insurance Commissioner Mike Geeslin laid out a number of reasons why regulators believe that TWIA management is not capable of operating the organization “in a safe and sound manner.”
Among other things, Geeslin said, information gathered by or submitted to TDI staff indicates that:
- In multiple instances, an outside claims adjuster was paid for adjusting work that appears not to have been performed and that TWIA paid claims based on that outside adjuster’s recommendation;
- TWIA management was aware of this and failed to report it in writing to the department’s insurance fraud unit within the required time frame after determining or suspecting a fraudulent insurance act had been committed; and
- TWIA failed to adequately address issues identified through a financial examination and analysis conducted by TDI, which indicated a lack of adequate controls over accounting, personnel and material decisions affecting day-to-day operations, as well as communications with staff, the board of directors and the department.
Although TWIA’s continued operations will not be disrupted, Geeslin said the Association would remain under administrative oversight until “the Commissioner determines that TWIA has satisfied the specified requirements.” (Read more on Insurance Journal Website Feb. 28, 2011)