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March 14, 2011 I mySA.com

DISASTERS IN JAP
Legislators
saw profits Frantil
on agency to aYE
they policed
Four Texas House insurance panel
members got commissions, fees
on Ike-related poucles, lawsuits.
BY USE OLSEN AND PURVA PATEL
lolsen@Chron.com

Texas lawmakers overseeing in-

surance issues pocketed tens of
thousands of dollars in windstorm-
related fees and commissions, even
as their committees were respon-
sible for overseeing the state-run 1
Texas Wind Insurance Association Records
- an agency under fire for being show
inefficient and allegedly corrupt. Rep, Trey
TWL.!\, which picked up the tab Martinez.
for much of Southeast Texas's Hur- Fischer
ricane Ike damage, remains the was an
subject of 2,000 lawsuits, a fraud in- attorney
vestigation by the district attorney in at1east
in Austin and, as of last month, di- oneTWIA
rect oversight by the state Depart- case, but
ment of Insurance. Martinez
Four of the nine lawmakers who Fischer
served on the House of Representa- said he
tive's 200S-1O Insurance Committee did not
- including one from San Antonio receive di-
rect com-
See TWIA/6A pensation,

Attendants assist a patient in a whee

Another btas
at damaged I
BY HIROKO TABUCHI
AND'MATTHEW L. WALD

New York Times I

TOKYO - Three days after a
massive earthquake and tsunami,
Japanese authorities struggled to
. & t
 IA
CONTINUEDFROM 1A
- benefited from hurri-
cane-related insurance
sales and litigation. They
were compensated in differ-
ent ways, including media-
tion fees, work on hun-
dreds of civil cases involv-
ing TWIA and a out of the ~;.o:::oo
state-created sister insurer,
commissions on policy
sales and shares of multi-
million dollar legal awards,
according to records' ob-
tained by the Houston
Chronicle.
Overlaps between legisla-
tors' public and private
roles are ubiquitous in Tex-
as, activists say. But the
scope of the Insurance
Committee entanglements
with TWIA compound the
anger of property owners
such as Dana Turner, who
sued TWIA to pay a claim
'. after lke razed her Crystal
Beach home to the slab.
"They're a bunch of
crooks," Turner said.
"They should be working
for us. They should be look-
ing out for our interest, not
theirs, just like TWIA
should have been looking
out for our interest;"
Virtually none of those
legislators' storm-related
profits were revealed in re-
quired financial disclosures
because of loopholes in the
law and lax deadlines. In
fact, reports on legislators'
2010 fmancial activities
won't even be due until
April 30 - near the end of
the current legislative ses-
sion.
Even the chairman of
, the committee says he had
no idea of the extent of the
lawmakers' work related to
TWIA and said he believes
disclosure should be im-
proved. . and rate issues. Since there mittee does. But that over- Todd Hunter,
Rep. Craig Eiland, D-Gal-
veston, current vice chair-
man of the House Insur-
ance Committee, got'
S627,000 in legal fees by
participating in a class-ac-
tion lawsuit against TWIA
last year that involved
horueowners who '_ost ev-
s 3>IVnbH.LHV3 NVdVr
$8,750for
related eases,
documents
Hunter
ation wtth _
2003 to IDI
served as its
a contract
compensa
$200,000,reco -
Hunter,
ed to the
2008, refused
on his payor
mediator.
'As a ... House
and past lobbyist. ::
ry informed and
on insurance .
MICHAELAINSWORTHIDALLAS MORNING NEWS . always open and fair
Rep. Martinez Fischer worked as a contract attorney for The Mostyn Law Firm, which said capacity that I serve,
Martinez Fischer accidentally signed off on one TWIA case but didn't actually work on it. ter said in an e-
A TWIA spa
erything down to the slab, 'lation of insurers in the im- cies from 2006 to 2010, re- Paula Smith, called
according to documents. mediate aftermath of Hur- cords show. ter's fees a
He also shared another ricane lke - including Though Taylor has been T~s share
$11.5 million in legal fees state-created programs critical of legal fees lawyers $43,750 for 2,592
awarded to him and six such as TWIA. made in TWIA cases, he $16.88 per case.
other law firms as part of In the meantime, TWIA sees no conflict posed by Martinez Fischer,
another lke-related settle- itself has descended into his TWIA commissions - Antonio lawyer, wo
ment, and participated in chaos: Created by the state which represent about 20 a contract attorney f
dozens of other TWIA as an insurer of last resort percent to 25 percent of his Mostyn Law Firm, a
cases. for coastal county home- business. Houston-based civil
In an e-mail, Eiland said owners, the agency almost "I don't do things as a tion firm that worked
he believes his Insurance went broke, faces an ongo- legislator that would bene- Eiland and other atto
Committee leadership role ing criminal probe and al- fit or be of detriment to just on class-action
is appropriate given his ex- legations that its managers myself That would be a against TWIA settl
pertise and the coastal hired family members and problem if I tried to benefit Galveston County last
communities he serves. He violated its own rules. myself with legislation Public records show
said no legislation handled Bills for its failures - passed," he said, noting he Mostyn Law' Firm
by the committee has posed and for multimillion dollar has tried to curb ~s more than $6 million .
a conflict with his legal civil settlements - could ability to raise rates in the lated settlements in 201
work be passed on to every prop- past, something that could though Martinez Fisi
"I represent people indi- erty owner in the state in hurt his commissions. said he did not receive
vidually at the courthouse, the form of rate increases. Records released by pensation directly
and I represent two coun- Eiland argued that the TWIA show that two other TWIA cases.
ties collectively at the Capi- special Joint Committee on members of the 2009-10 "He did not ever worn
tol," he said, "Representa- Oversight of Wmdstorm In- House Insurance Commit- any TWIA litigation d
tives of the 14 (Texas) coast: surance holds more direct tee profited directly or indi- his counsel relatio
al counties are vigilant responsibility for TWIA rectly from state-created in- with' The Mostyn
regarding ~s funding than the Insurance Com- surance programs Rep. Firm or during his ten
R-Corpus on the Insurance' Comf
have been no significant sight committee, created in Christi, and Rep. Trey Mar- tee, nor did he receive
storms prior to lke, 'claim 2009, has met only once. tinez Fischer, D-San Anto- pensation directly or .
issues' have never really The oversight committee nio. rectly related to TWIA
been a big part of the dis- is led by another House In-. Hunter, an attorney, has gation," said - Christi
cussions." surance Committee mem- been paid to mediate Gomez, a spokeswoman
The 2009-10House Insur- ber, Rep. Larry Taylor, R- TWIA-related cases. He got Martinez Fischer. '
ance Committee members Friendswood. Taylor, an in-. $65,000 as mediator in the However, court reco
were assigned to take the surance agent, made nearly so-called "slab" class-action show Martinez Fisc
lead on bills involving l;.Jlgu- $390,000 selling TWIA poli- settlement" in 2010 and served as attorney in
I
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MICHAELAINSWORTHIDALLAS
er worked as a contract attorney for The Mostyn Law Firm, which said
acddentally signed off on one lWlA case but didn't actually work on it.
'lation of insurers in the im-
mediate aftermath of Hur-
ricane Ike - including
state-created programs
such as TWIA.
In the meantime, TWIA
itself has descended into
chaos: Created by the state
as an insurer of last resort
for coastal county home-
owners, the agency almost
went broke, faces an ongo-
ing criminal probe and al-
legations that its managers
hired family members and
violated its own rules.
Bills for its failures -
and for multimillion dollar
civil settlements - could
be passed on to every prop-
erty owner in the state in
the form of rate increases.
Eiland argued that the
special Joint Committee on
Oversight of Windstorm In-
surance holds more direct
responsibility for TWIA
than the Insurance Com-
mittee does. But that over-
sight committee, created in
2009,has met only once.
The oversight committee
is led by another House In-"
surance Committee mem-
- ber, Rep. Larry Taylor, R-
~mbers Friendswood. Taylor, an in-.
surance agent, made nearly
$300,000selling TWIA poli-
MORNING NEWS "
cies from 2006to 2010,re-
cords show.
Though Taylor has been
critical of legal fees lawyers
made in TWIA cases, he
sees no conflict posed by
his TWIA commissions -
which represent about 20
percent to 25 percent of his
business.
"I don't do things as a
legislator that would bene-
fit or be of detriment to just
myself. That would be a
problem if I tried to benefit
myself with legislation
passed," he said, noting he
has tried to curb ~s
ability to raise rates in the
past, something that could
hurt his commissions.
Records released by
TWIA show that two other
members of the 2009-10
House Insurance Commit-
tee profited directly or indi-
rectly from state-created in-
surance programs:" Rep.
Todd Hunter; R-Corpus
Christi, and Rep.Trey Mar-
tinez Fischer, D-San Anto-
nio.
Hunter, an attorney, has
been paid to mediate
TWIA.related cases. He got
$65,000as mediator in the
so-called "slab" class-action
settlement in 2010 and I served as attorrtay in at
Rep. Craig Eiland:
He got $627.000
in fees from a -
suit against TWlA.
$8,750for other windstorm-
related cases, according to
documents and interviews,
Hunter has a long associ-
ation with TWIA: From
2003to 2007,when he was
out of the Legislature, he
served as its paid lobbyist,
a contract with annual
compensation of up to
$200,000,records show.
Hunter, who was re-elect-
ed to the Legislature in
2008, refused to comment
on his payor role as TWIA
mediator.
'~" a ... House member
and past lobbyist, I was ve-
ry informed and educated
on insurance issues. I am
always open and fair in any
capacity that I serve," Hun-
ter said in an e-mail.
A TWIA spokeswoman,
Paula Smith, called Hun-
ter's fees a bargain -
T~s share totaled"
$43,750for 2,592claims, or
$16.88"per case.
Martinez Fischer, a San
Antonio lawyer, worked as
a, contract attorney for The
Mostyn Law Firm, a huge
Houston-based civil litiga-
tion firm that worked with
Eiland and other attorneys
on class-action cases
against TWIA settled in
Galveston County last year.
Public records show The
Mostyn Law Firm earned
more than $6 million in re-
lated settlements in 2010,al-
though Martinez Fischer
said he did not receive com-
pensation directly from
TWIA cases.
"He did not ever work on
any TWIAlitigation during
his counsel relationship
with" The Mostyn Law
Firm or during his tenure
on the Insurance" Commit-
tee, nor did he receive com-
pensation directly or indi-
rectly related to TWIA liti-
gation," said Christina
Gomez, a spokeswoman for
Martinez Fischer. ""
However, court records
show Martinez Fischer
least one TWIAcase in Gal-
veston County and has
more than 100pending civil
suits in Harris County in-
volving hurricane losses,
including 50 people who
sued another state-created'
insurance program for non-
coastal homeowners who
can't fmd insurance else-
where - the Texas Fair
Plan Association.
Gomez did not respond
to a follow-up question
about those cases. "
In an interview, Steve.
Mostyn said Martinez
Fischer accidentally signed
off on one TWIA case but
didn't actually work on it.
Mostyn said the storm-re-
lated cases Martinez Fisch-
er has handled for his firm.'
involvedclaims by Spanish-
speaking policyholders.
Martinez Fischer stopped
working for the Mostyn
Firm in 2010, Gomez and-
Mostyn both said.
Neither Hunter or Marti- :
nez Fischer was reappoint-
ed to the House Insurance
Committee in February;
Taylor and Eiland continue
to serve.
House Speaker "Joe
Straus, R-San Antonio,
didn't respond to requests:
for comment on those'
changes. (Taylor and Hun-
ter remain on the Legisla-
ture's special windstorm'
oversight committee).
Insurance Committee '
Chairman John Smithee,
R-Amarillo, said even he /
didn't know so many of his .
own committee members-
had such close dealings:
with TWIA- and he'd like :
to change that.
"There is a bit of a public
perception problem when:
you have a quasi-state agen-
cy overseen by legislators
and some legislators have.
involvements with it," said
Smithee, who filed a bill to
overhaul TWIA last week. .
'~t the very least, you'
need total transparency,
where the public can go"
and see what's going on
with their officials, and:
perhaps have some prohib-
ition of where a legislator
could make money off of'
"TWIA."- .

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