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 RE:   SE 1628 and HB 3646  Dear Sirs,      I am writing to ask you to consider opposing SB 1628 and HB 3646 in the upcoming sessions.  I hope the information in this letter will help you understand the reason I personally oppose these articles from that of a small business owners perspective.       I am concerned that if these items were to pass they would greatly limit the needed protection, I feel are so important for policyholders like me.  We are a family run business that specializes in hardware and software used to personalize plastic cards.  Meaning we provide equipment and services used to personalize all the information you see on the plastic cards in your wallet.   We have been in business for over 32 years and currently office in a 5,000 square foot building on the edge of downtown Amarillo.  On May, 28, 2013 this commercial property was battered by hail, along with a large portion of the structure in the city.   This was estimated to be one of the most costly episodes in the history of Amarillo.   After this event, we contacted out agent to arrange for an estimate for repair.    We commissioned Andrus Brothers Roofing to work on the roof, and to issue a quotation on what the cost of repair would be.   Working with Garrett Young of ABR it was determined that the physical structure of the roof had been damaged  more than the original estimate deemed.     ABR strongly felt that a “patch” job would not be effective as the damage had lessened the integrity of the surface and the amount offered from the estimate would not cover the cost of patching the needed areas of the 7,746+ sq. ft. roof but would also only mask the damage which in their expert opinion was much more extensive.   The amount offered by the insurer would not even begin to cover the cost of a “band‐aid” type repair.  Based on the amount offered by the insurer and working with the square footage effected the payment amount would have allowed us around $1 per square foot to repair.   That amount would not cover materials, labor and any cost ABR would have incurred during the time of work.   Imagine would you agree to put $1.00 per sq. ft. carpet down in your home or business?  I doubt it, why would I agree to HOPE that this poor repair would protect my family business and the employees working for me.  

The Honorable Kel Seliger Texas Senate District 31 P.O. Box 9155 Amarillo TX 79105 Phone: (806) 374-8994

The Honorable Four Price Texas House of Representatives P.O. Box 2848 Amarillo TX 79105 Phone: (806) 374-8787

723 SW 7th Ave Amarillo, TX 79101 806-373-4148 | 800-749-9025 Fax: 806-376-7525 www.diamondbusiness.net

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ABR attempted to work with the insurance company to have revisions to the estimate, however those were not effective.    As a result nearly a year after the damage we felt the need to dispute the claim with legal action.  I had never hired a lawyer before, and it was the last thing I wanted to do.  But I had run out of options.  We have had additional damage in the year since we commissioned legal assistance.  Rain has leaked through the weak spots of the roof, and we are constantly concerned about the protection of the electronic elements used daily in our office as well as the products we sell.    We are back in the mist of storm season, nearly two years later, and my concern of leaks and additional damage is only being heightened.  Now with the proposed SB 1628 and HB 3646, I may be at risk of having the opportunity to have an honest review of my claim, and might be stripped of some of my rights against the insurer.   Why are the concerns of the big insurance companies any more important than those of mine?  Small business is the life blood of the Amarillo economy, and we have weathered many economic storms the larger business have not ‐ but it has not been easy.   But having our rights against insurance companies taken away, in the face of storms like this one, will weaken our efforts.  All I am asking for is a fair opportunity to have my claim reviewed and investigated and if deemed that the claim payment was unfair, then I would have the ability to take legal recourse.  I want all of my rights, including those to fight in state court, and to punish insurance companies that have treated others the way I have been treated.  I do not feel comfortable just accepting that one man’s option is correct, especially one I feel was dictated to him by a large powerful (and yes PROFITABLE!) insurance company.  I respectfully ask you to strongly consider the effects the passage of these items, and consider how they will affect many of your constituents.   It will weaken the rights of policyholder and only increase the power of insurance companies – overall it will undermine the economic progression of businesses such as mine in times of greatest need.  Please know you are welcome to contact me if you need any additional information or comments.  I look forward to hearing how your vote will be cast.  Respectfully,  

  Charlia D. Pence President   

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350 North Main, Vidor, Texas 77662 . 409.769.2418 . [email protected]

April 27, 2015 The Honorable Dade Phelan Room E1.324 PO Box 2910 Austin, Texas 78768 April 27, 2015 Dear Sir: The purpose of this correspondence is to express my concern about pending legislation before both legislative houses at this time. SB 1628 and HB 4636 both contain language that would reduce the protection and rights of the citizens of Texas and give the insurance industry undue protection and power under the law. It is my desire to encourage you to act in the defense of the people of Texas in this matter and OPPOSE these bills. Please allow me to explain my personal experience in this matter. I am the Pastor of the First Baptist Church of Vidor, Texas, a 7 building complex and the largest church in Orange County. On September 24, 2005, Hurricane Rita brought significant damage to our church property. While the disaster of that date is well documented, our disaster continued for the next SIX YEARS. The Church was insured by Guide One Insurance Company. The facts about our case are too numerous to cover in this letter; I will focus on issues that pertain to the legislation in question as best I understand it. As a church we did all we could to avoid litigation. The Church originally received a payment of $4,022.79. A year later, Guide One issued a supplement for $23.420.54, including repayment of the $5,000.00 deductible from the first payment (the Church had a $5,000.00 deductible but, in the first payment, Guide One applied a $10,000.00 deductible). We made agreements with the insurer to extend the statutory period so that we could reach a compromise. It was not until the second anniversary of the event that we retained legal counsel, notwithstanding we had worked with the insurer since the storm diligently to resolve the matter. We patiently worked with the insurance company providing information and research. We provided cost estimates as well as opinions from highly respected engineers in the area. We provided this support at our expense. We sought the assistance of the Texas Department of Insurance; none came.

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During this time the Church was forced to raise money from its members to make repairs to keep the insurance company from claiming that we were not mitigating our damages. It was obvious to us that our damages greatly exceeded the $4,022.79 we were paid. At the suggestion of our mortgage holder, we employed a public adjuster to seek settlement. After repeated efforts, the public adjuster reported that Guide One was not serious about settling our claim. After the Church filed suit against Guide One, that company used one legal maneuver after another to complicate the process and add expense to the proceedings. We had to make available for deposition our secretary, our maintenance employee, myself (twice), as well as the engineer we privately retained, the contractor (H.B. Nield) who built the Church, and the retained experts. Despite all of the evidence to support our claim, Guide One made multiple motions to dismiss (summary judgment). They lost all of them. After five years of legal maneuvering, a trial date was set. Yet, despite all of their attempts to dismiss the case and all of the information they learned about the amount of our damages, Guide One invoked the appraisal clause of the policy within 30 days of the trial setting (4 years after the hurricane). Their tactic was made clear in their request – after all of the legal maneuvering and delay, when liability to pay was clear, they chose a tactic to circumvent the late payment statute and its penalties. The Judge granted their request (there is no real waiver law in Texas for this provision). This delay tactic delayed settlement for over another year. It also CHEATED the church out of being reimbursed for all the expenses of pursuing the settlement and legal fees. At the close of the case, the Church’s attorney had incurred $128.204.48 in case expenses. It also granted undue protection to the insurance company from paying the 18% penalty due us for "delay in unpaid claims". The appraisal umpire (a retired state court judge) determined the amount of loss was $1,714,566.10. This was $1,710.543.31 more than the $4,022.79 that Guide One originally paid the Church. Guide One gladly paid the award then moved for dismissal. Unfortunately, a substantial portion of the appraisal award was used to pay the expenses and legal fees of the case. The church was forced to borrow an additional $2.5 million to complete the repairs to the property. The difference in the amount offered in 2005 ($4,022.79) and the amount awarded in 2012 ($1.7 million) should be proof of our rightful claim and the unfair trade practice of the insurance company in our case. Yet under the law we had no realistic recourse. Appraisal gave Guide One immunity for the way they treated our Church and mishandled the claim, and our congregation was left paying the consequences. From the appraisal award of our covered damages, the Church had to pay an attorney fee and reimburse the firm for their litigation expenses. I strongly encourage you to seek reform on behalf of the public in these areas. LIMIT THE TIME OF" APPRAISAL" to within 90 days of the claim. INCREASE "ACTUAL DAMAGES" to include amounts paid by the insured to pursue settlement, including legal fees and expense. EXPAND LEGAL PENALTIES OF 18% ON "DELAY IN UNPAID CLAIMS" to apply to all

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and any delay beyond 90 days and remove the exception of appraisal. Include criminal prosecution for adjusters and insurance personnel when settlement by a court or appraisal process reveal "unfair trade practices" to delay settlement. The people of Texas are not prepared for the disasters that befall them. However, it is very discouraging to find in the aftermath of such events that Texas law can be manipulated by those more familiar with the process, thus perverting justice. Please carefully consider these requests. Respectfully, Terry L. Wright, Pastor First Baptist Church, Vidor, Texas cc: The Honorable Robert Nichols PO Box 12068 Capitol Station Austin, Texas 78711

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350 North Main, Vidor, Texas 77662 . 409.769.2418 . [email protected]

April 27, 2015 The Honorable Robert Nichols PO Box 12068 Capitol Station Austin, Texas 78711 Dear Sir: The purpose of this correspondence is to express my concern about pending legislation before both legislative houses at this time. SB 1628 and HB 4636 both contain language that would reduce the protection and rights of the citizens of Texas and give the insurance industry undue protection and power under the law. It is my desire to encourage you to act in the defense of the people of Texas in this matter and OPPOSE these bills. Please allow me to explain my personal experience in this matter. I am the Pastor of the First Baptist Church of Vidor, Texas, a 7 building complex and the largest church in Orange County. On September 24, 2005, Hurricane Rita brought significant damage to our church property. While the disaster of that date is well documented, our disaster continued for the next SIX YEARS. The Church was insured by Guide One Insurance Company. The facts about our case are too numerous to cover in this letter; I will focus on issues that pertain to the legislation in question as best I understand it. As a church we did all we could to avoid litigation. The Church originally received a payment of ($4,022.79). A year later, Guide One issued a supplement for $23.420.54, including repayment of the $5,000.00 deductible from the first payment (the Church had a $5,000.00 deductible but, in the first payment, GuideOne applied a $10,000.00 deductible). We made agreements with the insurer to extend the statutory period so that we could reach a compromise. It was not until the second anniversary of the event that we retained legal counsel, notwithstanding we had worked with the insurer since the storm diligently to resolve the matter. We patiently worked with the insurance company providing information and research. We provided cost estimates as well as opinions from highly respected engineers in the area. We provided this support at our expense. We sought the assistance of the Texas Department of Insurance; none came. During this time the Church was forced to raise money from its members to make repairs to keep the insurance company from claiming that we were not mitigating our damages. It was obvious to us that our damages greatly exceeded the $4,022.79 we were paid. At the suggestion of our mortgage holder, we employed a public adjuster to seek settlement. After

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repeated efforts, the public adjuster reported that Guide One was not serious about settling our claim. After the Church filed suit against Guide One, Guide One used one legal manueaver after another to complicate the process and add expense to the proceedings. We had to make available for deposition our secretary, our maintenance employee, myself (twice), as well as the engineer we privately retained, the contractor (H.B. Nield) who built the Church, and the retained experts. Despite all of the evidence to support our claim, Gudie One made multiple motions to dismiss (summary judgment). They lost all of them. After five years of legal maneuvering, a trial date was set. Yet, despite all of their attempts to dismiss the case and all of the information they learned about the amount of our damages,

Guide One invoked the appraisal clause of the policy within 30 days of the trial setting (4 years after the hurricane). Their tactic was made clear in their request – after all of the legal maneuvering and delay, when liability to pay was clear, they chose a tactic to circumvent the late payment statute and its penalties. The Judge granted their request (there is no real waiver law in Texas for this provision). This delay tactic delayed settlement for over another year. It also CHEATED the church out of being reimbursed for all the

expenses of pursuing the settlement and legal fees. At the close of the case, the Church’s attorney had incurred $128.204.48 in case expenses. It also granted undue protection to the insurance company from paying the 18% penalty due us for "delay in unpaid claims". The appraisal umpire (a retired state court judge) determined the amount of loss was $1,714,566.10. This was $1,710.543.31 more than the $4,022.79 that Guide One originally paid the Church. Guide One gladly paid the award then moved for dismissal. Unfortunately, a substantial portion of the appraisal award was used to pay the expenses and legal fees of the case. The church was forced to borrow an additional $2.5 million to complete the repairs to the property. The difference in the amount offered in 2005 ($4,022.79) and the amount awarded in 2012 ($1.7 million) should be proof of our rightful claim and the unfair trade practice of the insurance company in our case. Yet under the law we had no realistic recourse. Appraisal gave GuideOne immunity for the way they treated our Church and mishandled the claim, and our congregation was left paying the consequences. From the appraisal award of our covered damages, the Church had to pay an attorney fee and reimburse the firm for their litigation expenses. I strongly encourage you to seek reform on behalf of the public in these areas. LIMIT THE TIME OF" APPRAISAL" to within 90 days of the claim. INCREASE "ACTUAL DAMAGES" to include amounts paid by the insured to pursue settlement, including legal fees and expense. EXPAND LEGAL PENALTIES OF 18% ON "DELAY IN UNPAID CLAIMS" to apply to all and any delay beyond 90 days and remove the exception of appraisal. Include criminal prosecution for adjusters and insurance personnel when settlement by a court or appraisal process reveal "unfair trade

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practices" to delay settlement. The people of Texas are not prepared for the disasters that befall them. However, it is very discouraging to find in the aftermath of such events that Texas law can be manipulated by those more familiar with the process, thus perverting justice. Please carefully consider these requests. Respectfully, Terry L. Wright, Pastor First Baptist Church, Vidor, Texas CC: The Honorable Dade Phelan Room E1.324 PO Box 2910 Austin, Texas 78768

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New Century Financial'We Believe in the Entrepreneur*

Since 1985

Senator Brandon CreightonTexas State Senate District 4350 Pine Street, Suite 1450Beaumont TX7770l

Representative Mark KeoughTexas State House District 15

P.O. Box 2910Houston TX 78768

RE: SE 1628 and HB 3646

Dear Senator Creighton and Representative Keough:

Our company has been providing financial support and services throughout the State of Texas (andvirtually every other state) for many years. I have recently been following SB 1628 and HB 3646as they make their way through the legislature. These bills are horrible for Texas businesses. Thislegislation is not "consumer friendly" as it has been labeled. It was clearly drafted by the insuranceindustry. It will be devastating for Texas residents and businesses should we have another naturaldisaster like Hurricane Ike. I respectfully ask you to vote against these bills. They will weakenthe rights of policyholders to the benefit of massive insurance companies - overall it willundermine the economic progression of businesses such as mine in times of greatest need. Please

know you are welcome to contact me if you need any additional information or comments.

Respectfully,

1610WoodsteadCourt A Suite 100 A TheWoodlandsTX 77380 LT7l3 8401600 A F7138401815 T8008058380www.NewCenturyFinancial.com

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BUILDING ENVELOPE ANALYSIS & SOLUTIONS

P.O. BOX 140390, Dallas, Texas 75214

ph. 817.572.4747 fax 817.887.2222

[email protected]

April 28, 2015

The Honorable Senators VIA HAND DELIVERY

Texas Senate

P.O. Box 12068

Austin, Texas 78711

Dear Honorable Senators:

I am writing to respectfully ask you to oppose SB 1628.

While I appreciate the sponsor’s intent to address perceived abuses in pursuing certain types of claims,

the bill would significantly harm my company’s business interests, those of companies similarly situated,

and many of my clients.

As a Texas-based business, our company depends on its insurance coverage. We have no interest in

pursuing frivolous claims but merely want the legislature to protect our interests against those

insurance companies that might unfairly deny or delay legitimate claims. Until now, that protection has

been found in the unfair settlement practices and prompt pay statutes (Chapters 541 and 542,

respectively, of the Texas Insurance Code). Unfortunately, the current bill would significantly undermine

those statutes’ safeguards.

Accordingly, we strongly oppose passage of SB 1628. Thank you for your consideration.

Best regards,

Phil Mayfield – Principal

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RMG Hospitality, LLC – P.O. Box 140097, Dallas, TX 75214 – 1-877-289-1236

The Honorable Kevin Eltife Texas Senate P.O. Box 12068, Capitol Station Austin, TX 78711 The Honorable Matt Schaefer Texas House of Representatives P.O. Box 2910 Austin, TX 78768 Re: SB 1628 and HB 3646 Dear Senator Eltife and Representative Schaefer: I am writing to respectfully ask your consideration in opposing SB 1628 and HB 3646. I would like to tell you of my problems dealing with my insurance company. If these bills were to pass, they would limit the badly-needed protections for policyholders like me. On May 1st, 2011, a hail storm passing through Tyler, Texas damaged the roof of the Quality Inn Conference Center. This damage went un-noticed by myself and my staff as we are not professionals in either the roofing business nor are we engineers. It was not until a few leaks started occurring in our facility that the General Manager on the property called in a roofing company to inspect and determine the course of action to fix the leaks. On January 29th, 2013, a Sworn Statement in Proof of Loss was signed and notarized claiming property loss on May 1st, 2011 at approximately 10:30pm. The insurance company, Merchants National Insurance, sent out an adjuster to verify the claim. Upon his verification, the insurance company decided to disagree with his determination and sent out another adjuster. This second adjuster also verified that hail damage had occurred on the roof and that the policy should be paid out. From their offices in New York, Merchants STILL denied the coverage and decided to send an engineer out to look at everything. Upon inspection, the engineer confirmed what the other adjusters had agreed to, and the adjuster assigned to the claim started to make a determination on the total loss and replacement cost of the entire roof. In October 10th, 2012, the adjuster estimated the total replacement cost at approximately $366,191.29.

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RMG Hospitality, LLC – P.O. Box 140097, Dallas, TX 75214 – 1-877-289-1236

Many business owners, like me, pay tens of thousands of dollars every year to insure our facilities because damage such as this can be costly. We try our best to serve our customers and take great pride in the businesses we operate. Nothing is more disheartening than being on the short end of this stick. As a hotel in your community, my job is to provide accommodations for guests to our community. Thousands of visitors come through our hotel each month. These guests come for work, leisure, travel, and they spent countless dollars supporting local businesses. We expect nothing less than 100% guest satisfaction from our employees. But, imagine how hard it is to motivate your staff when the condition of the hotel suffers due to the roof leaking. So many facets of the hotel cannot be upgraded due to the roof leaking. Weddings and corporate events are held at the hotel’s 4600 square feet of meeting space with damaged ceilings and louds drops of water disturbing everybody. My reviews have dropped the property from one of the top 10 in the area to the bottom 10. It’s a shame that we cannot provide better for them because our insurance company decides they can disagree with professional assessments. Merchants National Insurance decided to shirk their responsibility as an insurance carrier by trying to find every technical detail they can find. They initially felt that the roof was damaged prior to the policy period, but retracted once we showed them the inspection fee they charged and it became clear they inspected the entire property before binding coverage. Now, they feel we sat around knowing the roof was leaking and decided to not do anything about it. Fortunately, we maintain records that show no active roof leaks were found between 2010 and 2011. It was not until 2012 that we began noticing drops of water leaking through certain areas of the roof. It is a complete disregard for responsibility which lets Merchants National get away with such behavior. Such actions within the hospitality industry would put me out of business immediately with my customers because of the legal rights they possess to ensure I provide a safe, working facility. It is my understanding that if SB 1628 or HB 3646 were the law, an insured in my position would have little or no recourse against the insurance company. Based on my difficulties getting this claim paid, I respectfully suggest this is no time to weaken the rights of policyholders or to increase the power of insurance companies to avoid paying valid claims. Sincerely, Manu Lail Managing Partner RMG Hospitality, LLC P.O. Box 140097 Dallas, TX 75214 [email protected] www.rmghospitality.com 847-452-3746 cell

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April 26, 2015

To our distinguished Texas Senators John Cornyn and Ted Cruz.

Also to our Texas House Member Joe Straus.

I direct this letter to you with my deepest respect, realizing that

you will be able to help our church with an insurance issue which

sadly has been a drastic blow on our behalf.

Let me introduce myself and the purpose of this request.

My name is Reverend Gracia Ortega, I am the Senior Pastor of

Templo Ebenezer, Assembly of God for 18 years.

Our church is located on 734 N. Taylor Street, in Amarillo Texas

79107.

We are a small congregation, who believes that God has given

our United States Nation a form of a just government that wants

the best for the people.

Our church building was damaged by hail. At that time we

were under National Loyd’s Insurance Company. We reported the

damage, and the company sent an adjuster. They sent a check

with an amount that did not cover the costs of the material

needed, much less what a contractor was charging for fixing the

roof. We felt this was a very unjust manner of handling our claim.

Templo Ebenezer A/G

734 N Taylor Amarillo, Tx. 79107

P.O Box 5036 Amarillo, Tx. 79117

Tel. (806) 681-4668

Email: [email protected]

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We were informed of Mr. John Scott Black of:

Daly & Black P. C.

2211 Norfolk St. / Suite 800

Houston, Texas 77098

Phone ( 713 ) 655 – 1405

We really were in need of advice and under the circumstances

decided to ask for legal help.

I appeal to your kindness and understanding, because until this

day; we are still having problems with the roof. My biggest request

is to get justice on behalf of everybody that reunites.

If the Insurance Lobby, who is trying to change the laws in

Texas, to make it impossible to sue them, when they cheat

people, it will be really sad that us as United States citizens will

not be able to enforce our rights.

I pray that you take this letter in consideration, and thank you

beforehand for all your help.

May the Lord Bless you abundantly.

Serving the Lord

Rev. Gracia Ortega

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Witness Testimony

Texas Senate Business & Commerce Committee

SB1628 – Taylor, L (CSSB 3646- Smithee)

Relating to insurance claims and certain prohibited acts and practices in or in relation to the business of insurance; amending provisions that are or may be subject to a criminal penalty.

Testimony heard: 3-31-15

Witness Transcribed: David Stein, Owner, Roger Beasley Automotive Group - Against the Bill

Thank you very much Mr. Chairman, members of the board, my name is David Stein, and I represent Roger Beasley Automotive Group. We’re an automotive group that has 14 dealerships here in central Texas. And I also serve as a member of TADA. I’m not speaking on behalf of [the] Texas Automobile Dealers Association, however I have a lot of dealer friends and I don’t know too many of them that would be in favor of this bill. So I’m here today to speak in opposition to Senate Bill 1628 in its entirety.

I’m a simple man, a very simple man. I’ve heard a lot of things and I’ve learned a lot of things since I’ve been here. One being that major insurance companies admit fault in how they process claims, how things fall under the rug and certain things happen.

And I’m also hearing that the law on the books today is a good law, and when I hear that, as a simple man I’m saying: OK, well then why are we looking at a bill that is pretty much strictly in favor of the insurance companies?

I’ll tell you what happens when a claim is not paid in a prompt manner. We’ve experienced this many times over the years. In the past 25 years we’ve probably dealt with 15 hail cases, and the last one was catastrophic. It was near 8.5 million dollars. Unfortunately, they got the numbers wrong. Unfortunately, we had to go back and forth and [it] resulted in 4 or 5 months of arguments and they missed about $750,000 in damage. So we had to go through that process, as well as after that the insurance premiums for the next 3 years raised astronomically.

How many business owners, let alone the common policyholder, the common consumer, are versed in insurance law? I mean even the people speaking today, very few. Adding this, entirety of this bill is going to make it even harder for the common person, the common policyholder.

What happened to the accountability of the insurance companies? You know we’ve heard a lot about accountability and I think we’ve learned what that accountability is: they know they have problems they need to fix and everybody else thinks the law is good. So I’m glad this bill is in this room because all of you understand business. And [this is] a good place for it to be.

As you know there are a lot of car dealers in the state of Texas, probably every single district, and truthfully I do not know one of them -- and I know a lot of them -- that would be in favor of this. I don’t see anything good in it whatsoever. Where in this bill does it protect families? Where in this bill does it protect the small businesses, the medium or large businesses? Nowhere.

Page 70: 35 Texas Businesses against SB1628

In fact it requires policyholders to swear [the] amount of damage is true even if they don’t know. That’s what I’m talking about: the common person, they don’t know the laws.

And I’ll end with this: this bill makes very clear that the insurance company has no risk whatsoever and I just think that it should be removed in its entirety.

Page 71: 35 Texas Businesses against SB1628

Witness Testimony

Texas Senate Business & Commerce Committee

SB1628 – Taylor, L (CSSB 3646- Smithee)

Relating to insurance claims and certain prohibited acts and practices in or in relation to the business of insurance; amending provisions that are or may be subject to a criminal penalty.

Testimony heard: 3-31-15

Witness Transcribed: Dr. Ray Callas - Against the Bill

My name is Ray Callas, I’m an anesthesiologist out of Beaumont Texas. Also, for the record, I am a board member of the Texas Medical Liability Trust Insurance Company. I am also on the council on legislation for the Texas Medical Association, but I’m not here doing any medical doctoring stuff today. I was unfortunate enough to be born in the great city of Galveston, Texas. Did my training there, did my residency there and when the hurricane came through, I lost my house to six foot of water. I sit on the medical liability claim, and I understand what Senator Taylor is trying to do, but I had an adjuster come out to my house and he told me, point blank, that my claim was only for $39k dollars on this house.

I already have $200k in medical school debt, now I have a house that cannot even be rebuilt for $39k. He explicitly told me that this is what the insurance is going to pay me, and that is it. So, then I asked for another adjuster. Another adjuster came out to my house and he said ‘I find the same thing, $39k’ and I said ‘well that’s a problem because six foot of water, mud all the way up past my electrical plugs. I mean it’s not even functional.’ I just took it as bad luck. As a physician in ethics, I didn’t even know about the legal ramifications of going down this pathway.

I happened to be taking care of one of my friends, who is an attorney in Beaumont[…] he said, ‘why you look so bad?’ I said I’m just trying to get by because I’m having a hard time even collecting money from the insurance company from a business standpoint because we’re playing in clean claims games all the time with the insurance company with 30%, 40% of my staff and I said I’m getting screwed by the insurance company. He goes ‘You don’t have to get screwed by the insurance company,’ he says ‘why don’t you fight this?’ So I did, and thank God I did, it made me whole. But, is it correct?

So I’m really concerned about not holding these adjusters accountable and [regarding] immunity, in my own personal business, I’m held accountable as a physician to make sure that I have a clean claim for payment and I’m also held accountable all the time for what I do as a physician to take care of my patients. One thing that I don’t agree with, is holding anyone immune to any situation that these people go through in catastrophic time, or any type of time when it’s dealing with insurance.

Page 72: 35 Texas Businesses against SB1628

Witness Testimony Texas House Insurance Committee CSSB 3646- Smithee (SB1628- Taylor)

Relating to insurance claims and certain prohibited acts and practices in or in relation to the business of insurance; amending provisions that are or may be subject to a criminal penalty.

Testimony heard: 4-23-15

Witness Transcribed: Leslie Thorne- Against the Bill

Good evening, I’m Leslie Thorne. I’m an insurance litigation partner at Haynes and Boone. I am testifying in my personal capacity and I’ve also been authorized by a number of my clients to express their concerns about the bill. Those clients include:

• Sovereign Bank; • Trammell Crow Residential; • Erickson; • La Quinta Hotels; • Centex Homes; • NCH Corp.; • Ferrovial Agroman; • And Weber LLC

As an initial matter, I want thank Chairman Smithee for the work that’s already been done on the bill. When we compare the original bill with the substituted bill, we see significant improvements and I think that there was a significant effort made to address unintended consequences of the bill, which, obviously, is in issue in most cases. While the substituted bill is much improved, we believe this bill still has a few problems that could cause unintended consequences for policyholders, both consumer individual policyholders as well as business policyholders. As Chairman Smithee mentioned, policyholders, both individual and business policy holders currently have a few meaningful ways to keep their insurers in line, and those are:

• The threat of having to pay attorney fees; • The penalties under 541; • And the penalties under 542

Without those, Insurers simply don’t have the incentive to pay claims in a prompt and fair manner. This bill may undermine some of those tools, especially for business policy holders. Among the ways that it does that, I’ll just mention a couple given the three minute rule.

With respect to 541, concerning holding insurers responsible for DTPA type things, the original bill would have required policyholders to show that they suffered actual damages that were entirely independent of the denial of policy benefits. That is especially significant for business policyholders because they don’t have damage to credit or mental anguish damages. Thankfully, that’s been amended; however, we would ask that actual damages specifically be defined in the bill to include benefits owed under the contract and attorney fees incurred to pursue those benefits to make it clear that, that’s enough.

Our other concern is the pre-suit notice. We don’t believe that any further pre-suit notice is necessary and we don’t believe it requires any changes at this time.

Leslie Thorne Haynes & Boone 512-867-8445


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