Texas Wind Insurer of Last Resort Placed Under Administrative Oversight
In a letter dated February 28, 2011, Texas Insurance Commissioner Mike Geeslin informed Texas Windstorm Insurance Association General Manager Jim Oliver that his organization is being placed under administrative oversight. In the opinion of the state’s Department of Insurance, the TWIA is no longer capable of operating “in a safe and sound manner.”
As the state’s property insurance company of last resort for wind in the Texas coast counties, TDI has found that the TWIA has, in multiple instances, paid outside claims adjusters for work that was not performed and then paid out claims based on that non-existent adjusting.
Geeslin said the management of TWIA was aware of, but did not report these incidents to the fraud unit and failed to adequately address the irregularities. He cited a lack of control over accounting procedures, personnel, and day-to-day operations as well as in-house communications and those with TDI itself.
TWIA will remain under administrative oversight until it has met specified requirements, but its operations will not be disrupted. Regulators, legislators, and the press have closely scrutinized TWIA since the aftermath of Hurricane Ike in 2008 due to irregularities in its processing of claims and executing its financial responsibilities.
TDI Director of Rehabilitation and Liquidation Oversight Angel Garret will serve as the commissioner’s representative while the Association remains under oversight proceedings.