After hundreds of homeowners and their lawyer, Democratic donor Steve Mostyn, collected millions this year in a post-hurricane settlement, the chairman of the Texas House panel on insurance, state Rep. Larry Taylor, R-Friendswood, wants to know how the Texas Windstorm Insurance Association paid out its claims — and how much lawyers were paid to win them. TWIA, as it's known, is a quasi-public organization that oversees the state's windstorm insurance pool of last resort. Lawmakers have for years been struggling to make sure it's working efficiently, and insurance companies have blamed Texas' high rates on the fact that Texas ratepayers must subsidize those who live on the hurricane-prone coast.
Mostyn represented many of those homeowners in the wake of Hurricane Ike and helped win them a massive settlement, in which Mostyn's firm reportedly earned $86 million in legal fees. "I make the insurance companies pay the fee, that's what the law says, if they're found liable," Mostyn said in an interview with the Tribune last week.
In a letter to the TWIA general manager this week, Taylor asks for an accounting of each of the cases in the $189 million settlement with the 2,400 homeowners Mostyn represented this year. Taylor is asking for a list of attorney's fees and a description of the work that justified the totals claimed. The policy issue here is whether attorneys are taking too large a chunk of the limited windstorm insurance fund. Is it in the state's interest to make big payouts to attorneys? Is it a misallocation of the money that goes into the pool? On the flip side, trial lawyers like Mostyn say for-profit insurance companies are making record profits while failing to write strong enough policies to cover the people who live on the coast, which results in the need for the state insurer of last resort, TWIA. "The insurance companies want to take the profit, but they want the public to take the risk," Mostyn said.
But Mostyn argues that this isn't about policy. Instead, he says he's being targeted for his largesse in political giving to Democrats and the new Back to Basics Political Action Committee. His camp has responded with a lengthy open records request to Taylor's office. You can read it for yourself, but it asks for all documents or communications between the representative's office and TWIA, as well as communication between Taylor and political players such as Texans for Lawsuit Reform, the trial lawyers' rival organization.
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