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    Munoz (D)


    Nitrous Oxide Deceptive Act






    Relates to a deceptive act or practice related to the sale, marketing, packaging, or advertising of nitrous oxide.




  • In 2013, a company that calls itself “the largest residential roofing company in Texas”, lost a legal battle over its contracts and the services it offers its customers. Lon Smith Roofing & Construction was ordered by a federal magistrate judge to pay $275,000 in damages and attorney fees to a Fort Worth couple who claimed the company failed to keep its contractual promise to arrange with the couple’s insurance company to pay for a new roof.

    For those that don’t already know, the facts of the case go something like this: Lon Smith’s contract with Mr. and Mrs. Reyelts promised to make all arrangements with the Reyelts’ insurance company to cover the cost and replacement of a new roof. Lon Smith installed the new roof, but never made contact with the Reyelt’s insurance company. When the insurance company received a $15,000 bill for the new roof, it refused to pay, saying they had not seen the old roof before it was torn off nor been contacted by Lon Smith. Lon Smith went on to bill the Reyelts for the entire amount of the roof and, when they failed to pay, sent three demand payment letters threatening a lawsuit unless they paid. The Reyelts hired an attorney and sued Lon Smith claiming that Lon Smith failed to perform under the contract and alleging it was illegal for Lon Smith to negotiate on behalf of the Reyelts with their carrier. The court agreed and ordered Lon Smith to pay $275,000 in damages and attorney fees based on several different factors affecting the case. Lon Smith’s contract, read, in part: Lon Smith agrees “to pursue homeowners’ best interest for all repairs, at a price agreeable to the insurance company” and to work out “the final price agreed between the insurance company” and Lon Smith.

    This is a clear violation of Texas UPPA laws.  

    In coordination with the Texas Association of Public Insurance Adjusters, the National Association of Public Insurance Adjusters filed an amicus curiae brief in the Fifth Circuit Court of Appeals supporting the trial court decision.  The Fifth Circuit considered the party’s arguments and affirmed the trial court’s decision. The result: a contractor contingency agreement giving the contractor the right to negotiate a claim on behalf of a policyholder is illegal and, if held to account by the policyholder, the roofing contractor must return all amounts paid under the contract. 

    Following the outcome of the Reyelt’s case, another important development occurred when Lon Smith filed suit against a homeowner, Joe Key, in Tarrant County under similar circumstances. The Court in that case struck down Lon Smith's contract as void, illegal and unenforceable. As a result of the Key case, a recent and very important development occurred when the 236th District Court certified a class action against Lon Smith Roofing comprised of all customers since 2003. Should the class action plaintiffs prevail, all Lon Smith customers over the past decade will be entitled to the return of all amounts paid for their roofs. The action taken by these two Court’s has sent a powerful message to contractors throughout Texas - attempting to offer the services of a public insurance adjuster without being licensed is against the law and you will be held accountable!

    TAPIA applauds the hard work of the attorneys and other aligned advocates who’ve worked tirelessly in order to help bring awareness to this important issue. TAPIA will never stop working to protect the integrity of public insurance adjuster licenses and to ensure that Texas policymakers understand the dangers of unauthorized public adjusting. 

    TDI Update
    License Renewals and Contract Approvals

    During the last several years TAPIA has worked closely with the Texas Department of Insurance to help alleviate some of the common issues plaguing public adjusters in Texas. At times those issues are substantive and at other times they’re procedural. In the case of license renewals and contract approvals the case is very much the latter. Texas PA’s have been frustrated with the length of time it's taken to receive license renewals and contract approvals. Making the matter worse, contracts are seemingly approved with ease for one entity then lengthy delays and/or denials occur with near identical contracts submitted by another. To be sure, it’s an issue we have brought to the department’s attention on more than one occasion. 

    TAPIA’s meetings with the Department have yielded the following actions:

    • TDI has requested that TAPIA draft a standard “form” contract that can be used for quick approval by any Texas licensed public adjuster. The department is looking to TAPIA for guidance and support on this issue in order to help provide a standard solution to improve upon Form 535. 
    • Following meetings with TAPIA representatives, TDI has committed to updating it’s web portal by dedicating more space and information to educate consumers on Texas public insurance adjusters. The department has asked that TAPIA assist in the content and subject matter of that enhanced web portal. 
    • Pursuant to TAPIA’s request, TDI has confirmed that if a license renewal payment and request are received by TDI, the PIA’s license won’t expire due to a failure of TDI to address it by the expiration date. The license will show active in TDI’s system (and through its public interface) despite any expiration date, until the approval catches up.

    TAPIA representatives are scheduled to meet with TDI staff again this week to look at other ways of reducing the backlog of approvals and to improve the content requirements for public adjuster contracts. The department is currently working on a 5-8 day delay, from the date of submission, in reviewing a contract or processing a license renewal. This delay is based largely on workforce reductions and the manual nature of PIA renewals. That lag should be taken into consideration by PIA’s submitting contracts or seeking license renewals. Any issues arising during the process will potentially add to that delay.

    You can be confident that TAPIA is working hard, along with the good folks at the TDI, to improve the process of PIA license renewal and contract reviews so that PIA’s spend less time working on the “procedural” and more time working on the “substantive” pieces of their business!


    Don Wood, TAPIA 2016 President




  • Claims Magazine is providing the following free guidelines and regulations in order to help adjusting professionals stay abreast of each state’s unique property and casualty claim-handling requirements. Each guideline features an explanation of the act to be performed, compliance timeframes for each act, and hyperlinked references to each state's insurance code. The links were compiled by compiled by Lynch & Associates, We hope you find them useful and informative. Please note that these guidelines were updated in 2010, but occassional changes in each state's code are to be expected. These guidelines should be used as a reference only, and do not supercede each state's published regulations.

    Just Looking for Each State's Deadline for Acknowledging Receipt of a Claim? Download PDF

    List of State Guidelines:

  • By Brian S. Goodman,  Esq., NAPIA Counsel, HODES, PESSIN & KATZ, P.A.
    Friday, October 7, 2011

    As the end of the year approaches, activity in the state legislatures is just heating up. In the coming term, many local legislators will be focusing on issues related to public adjusting. We know for a fact that bills are currently under consideration in Pennsylvania, and there is expected to be an added regulation addressed in Indiana focusing on the Unauthorized Practice of Public Adjusting. The Alabama legislature convenes in early 2012, and we are working diligently to th ensure that Alabama becomes the 45state to license public adjusters.

    If any NAPIA member hears of legislative activity in their particular state, please make us aware of this as soon as possible. Often, issues come up that touch on our profession, and the sooner we know about these the better.

    We are working hard with able counsel and lobbyists to protect the profession and to ensure the proper and ethical practice of public insurance adjusting. Gone are the days when public adjusters flew “under the radar;” we are now an accepted and respected player in the insurance industry and claims process. This gives all of us all the more reason to stay on top of legislative enactments and to insist that our craft is practiced in an ethical and proper manner.

    I will be talking about ethics and legislative issues in greater detail at the upcoming  First Party Claims Conference  in Providence, Rhode Island. We hope to see many of you there.

  • The American Association of Public Insurance Adjusters is busy getting the word out about how hiring a public insurance adjuster can add value to a policyholder’s insurance claim. AAPIA prides itself on being a professional organization representing public adjusters from all over the United States. AAPIA sponsors educational, social, and networking programs throughout the year.

    Recently, Gene Veno, the President of the American Association of Public Insurance Adjusters, was interviewed about the role of a public adjuster and the value a claims professional can add to a property damage claim when that professional is working on behalf of the policyholder.

    It is still not uncommon for me to hear from policyholders that they only became aware of the services a public adjuster can provide after they had a negative experience during an insurance claim and turned to a public adjuster for help. But the work of public adjusters is most valuable if people are aware of them early in the claims process. Individuals, families, condominium associations and businesses that suffer losses need to know that in most states they have the ability to hire their own adjuster to help navigate the claim process. As Veno explains in the interview, 44 states now have licensed public adjusters available to policyholders.

    One of the ways AAPIA is spreading the word is by doing radio and podcast interviews to educate the public. You may recognize Merlin Law Group’s very own Sean Shaw in the blogtalk radio show Legislative Wrap up with AAPIA's Gene Veno. AAPIA also interviewed Florida public adjuster, Dick Tutwiler, of Tutwiler & Associates.

    The AAPIA website provides many great resources for those who want to stay informed on issues relating to public adjusting.

    In prior posts, Chip Merlin has detailed some of the work AAPIA has been involved in during the last year.

    Take a listen to AAPIA’s The Value of Hiring a Public Adjuster:


    July 7, 2011, 8:02PM

    The state windstorm insurer of last resort is short $200 million to cover Hurricane Ike claims, and its choices for raising the money present new problems.

    One approach could tighten the state's general revenue and its home insurance market for up to five years, and the other could reduce the windstorm insurer's reserves for paying future hurricane claims.

    Hurricane Ike, which struck the upper Texas coast in September 2008, has resulted in an estimated $2.3 billion in claims to the Texas Windstorm Insurance Association. The insurer raised $2.1 billion by assessing insurance companies statewide, draining its catastrophe reserve trust fund and collecting on re-insurance it buys to provide partial coverage for claims it pays.

    In deciding how to make up the difference, TWIA will have to determine what law to follow — a dilemma that gives another headache to an operation already under fire for delays and confusion in processing claims from Ike and other storms.

    The industry believes TWIA will collect the money by assessing insurance companies statewide as it was allowed to do under the law in effect when Ike hit, said Beaman Floyd, executive director of Texas Coalition for Affordable Insurance Solutions, an industry trade group.

    The industry believes TWIA will collect the money by assessing insurance companies statewide as it was allowed to do under the law in effect when Ike hit, said Beaman Floyd, executive director of Texas Coalition for Affordable Insurance Solutions, an industry trade group.

    That law allows companies to recover the payments through tax credits for up to five years, meaning less money for an already tight state budget.

    And paying the assessments immediately while waiting five years to recover them all through tax credits could reduce the surplus accounts companies are required to keep for unexpected claims - straining the availability of insurance in the state.

    "It would be like making an interest-free loan to the state, and they can only collect a percentage back each year," Floyd said. "If you had a strain on your surplus and the ability to grow surplus, that would limit how much insurance you could write in Texas."

    In 2009, lawmakers eliminated the tax credits, and it's not clear if companies can still recoup Ike-related assessments.

    The new law allows TWIA to use current premiums to make up for the shortfall, but doing so would reduce TWIA's catastrophe reserves, its actuary, Jim Murphy, noted in a June memo to its interim general manager.

    Insurance Commissioner Mike Geeslin sent a letter to TWIA advising that current premiums probably shouldn't be used to pay claims from earlier storms, and suggested the board get legal advice on which law applies.

    Jerry Hagins, a spokesman for the Texas Department of Insurance, said it would be up to the state Comptroller's Office to decide whether new assessments stemming from storms before 2009 would be eligible for tax credits.

    The Comptroller's Office hasn't had any current requests for such credits but is evaluating the issue, said spokesman R.J. DeSilva.

    Hagins said that additional assessments shouldn't affect insurance rates if companies can recover the payments through tax credits, but if they can't, nothing would prevent them from including the amounts in filings for rate increases.

    "We would review any amount in a filing to make sure it is reasonable and look to see it was structured to be spread over several years," Hagins said. "It's possible, but it's not a certainty that an assessment could be recouped through an increase."

    "We would review any amount in a filing to make sure it is reasonable and look to see it was structured to be spread over several years," Hagins said. "It's possible, but it's not a certainty that an assessment could be recouped through an increase."

    This may be the last time TWIA faces this dilemma. Legislation passed in the recent session allows TWIA to issue bonds to raise money.

    Once TWIA drains about $127 million in its catastrophe reserve trust fund, it can issue bonds that it would repay from premiums and other revenue.

    But TWIA projects those bonds would be hard to sell. So it more likely would cover future claims by issuing up to $1 billion in bonds to be repaid through assessments against private insurance companies and surcharges to policyholders in the coastal area.

    If that $1 billion were exhausted, the insurer could issue $500 million in bonds that would be repaid by more assessments on insurance companies. After it spends $1.6 billion on claims, TWIA could tap $636 million in reinsurance under its contract.

    It hasn't determined how it would fund claims beyond that.

    Read more:

  • Public Insurance Adjusters Are the People's 'Good Guys'
    By David Beasley, Sunshine State News

    Click here for full article.

  • Insurance Journal
    Texas Regulators Move to Take Over Windstorm Insurance Association
    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 of 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."

    Specifically, TWIA must:

    • Submit all senior or executive level personnel decisions to the commissioner's representative for prior review and approval;
    • Submit expenditures for prior review and approval as requested;
    • Develop a plan to ensure complete, accurate and timely communications with its board of directors so that the board can meet its primary objectives as set out in the state's insurance code, as well as other responsibilities.

    Angel Garrett, TDI director of Rehabilitation and Liquidation Oversight was named to serve as the commissioner's representative while the Association is under administrative oversight.

    Under Scrutiny

    Since 2008 and the aftermath of Hurricane Ike, TWIA has been under intense scrutiny by regulators, legislators and the media, mostly due to the handling of its claims processes and financial responsibilities.

    TWIA's personnel practices have also come under fire.

    In a letter dated Feb. 23, 2011, Danny Saenz, senior associate commissioner at TDI, informed Oliver that the department was conducting a "limited scope examination" focusing on the "employment, performance, and termination and/or resignation of Reggie Warren and Bill Knarr."

    Oliver was instructed to provide Saenz with information about the circumstances of the departures of Warren and Knarr from TWIA, about their employment and job performance, and about any severance packages or benefits they received when they left the Association.

    Saenz also wanted information detailing investigations into any "inappropriate, unprofessional, or unethical conduct that may have led to the resignation, termination or separation of any staff with the level, title or responsibilities commensurate of 'vice president.'"

    State legislators have been highly critical of TWIA's handling of a massive class action lawsuit dealing with slab - or wind versus water - claims resulting from Hurricane Ike. Rep. Larry Taylor of Friendswood, particularly, believes a nearly $190,000 million settlement reached last year in a class action over slab claims was outrageous, particularly due to the fact that fees paid to attorneys - both plaintiff and defense - amounted to more than $95 million.

    Rep. Taylor, an independent agent, is co-chairman of the Joint Windstorm Insurance Legislative Oversight Board, a member of the House Insurance Committee and the Select Committee on Emergency Preparedness, and the State Representative for House District 24 in Galveston County. He said work-in-progress legislation would rein in defense costs by, among other things, limiting the window of time that TWIA insureds have to file lawsuits over claims.

    Claims from Hurricanes Ike and Dolly in 2008 wiped out TWIA's reserves. As of December 2010, the Association had paid insured losses of $1.85 billion from Ike claims, but losses may reach $2.3 billion, the Insurance Council of Texas reported. The number of TWIA claims from Ike had risen to 92,800 and 4,800 lawsuits had been filed. More than half of those lawsuits have been settled.

    An emergency meeting of TWIA's board of directors was called for the afternoon on Feb. 28. On the agenda was a discussion of the issues brought forward by TDI in the administrative oversight letter, as well as those in the letter from Saenz questioning TWIA's personnel policies, and a review of Oliver's status as general manager.


  • The Senate has passed the Dodd-Frank financial services reform package that will have some impact on the insurance industry and add involvement by the federal government in the state-based insurance regulatory system.

    The 2,300-page bill, which passed the Senate by a 60 to 39 margin yesterday, aims to address regulatory weaknesses blamed for the 2008 financial crisis. It gives regulators broad authority to rein in banks, limit risk-taking by financial firms and supervise previously unregulated trading. It also makes it easier to liquidate large, financially interconnected institutions, and it creates a new consumer protection bureau to guard against lending abuses.

    The National Association of Surplus Lines Offices (NAPSLO) hailed the passage of the bill as a "big win," after several provisions were included to modernize the surplus lines industry.

    Those changes would speed up and ease access to the surplus lines markets by consumers, and reduce administrative compliance issues by establishing that only the home state of the insurer can regulate multi-state transactions.

    "These surplus lines reforms represent a nearly decade-long industry effort spearheaded by NAPSLO to modernize and reform surplus lines regulation. With the legislation now approved by Congress, we look to the states to implement its provisions in the way Congress intends and bring about, on a nationwide basis, the anticipated efficiencies in surplus lines regulation and tax payment mechanisms the legislation promises," NAPSLO President Marshall Kath said.

    Ken A. Crerar, president of The Council of Insurance Agents & Brokers, echoed those statements, adding "passage of this bill is important not only for (agents) but also for their commercial clients… Now that multi-state surplus lines placements will be subject to regulatory oversight by a single state, a substantively streamlined process will be created for commercial consumers, regulators, insurers and brokers. This change will provide for a uniform approach to regulating the surplus lines market and once signed into law, will go a long way to addressing long-time marketplace problems."

    The bill also establishes a federal office of insurance (FIO), which will increase the federal government's role in addressing insurance-related issues.

    David A. Sampson, president and CEO of the Property Casualty Insurers Association of America (PCIAA), said that the final version of the bill contained a number of changes that would lessen the impact of federal oversight of the state-regulated insurance system, but also said "deep concern(s)" remained over the impact of the legislation.

    "It is important to note that this is still only the midpoint for financial services reform. We have a long road ahead of us as we move into the rule development phase," Sampson said. "We look forward to working with regulators to preserve a strong and stable insurance marketplace to protect home, auto and business owners."

    Leigh Ann Pusey, president and CEO of the American Insurance Association (AIA), said the completed bill "largely recognizes that property and casualty insurers do not pose systemic risk," which she called "a meaningful acknowledgment for the many policyholders that rely upon our low-risk business model to provide them security in times of uncertainty."

    Pusey also said the bill "takes necessary steps to prevent insurers from being lumped into many of the new 'bank-focused' provisions. This, too, is a substantial recognition of the insurance business model."

    President Obama is expected to sign the bill.

  • Allied Insurance, based in Des Moines, Iowa, announced new changes to its commercial quoting process that it says will allow independent agents to write business insurance quicker and easier. Among the new features:

        * 25 percent - 45 percent of previously asked commercial application questions have been eliminated (depending on the specific business-owners-product program);
        * Elimination of up to six supplemental applications;
        * Addition of clearer questions to improve underwriting efficiency and turnaround times.

    Allied Insurance President W. Kim Austen said the "changes reflect direct feedback from our agents, so we felt compelled to take steps that make Allied easier to do business with."

    Allied Insurance has also recently announced significant product changes with expanded coverage options and is now offering coverage enhancement endorsements for a wide range of industries and products.

    With a new application process for premier business owners and business auto, independent agents will be better equipped to meet their clients' needs with superior service and coverage from Allied, the company said.

    Allied operates in 34 states through a network of independent agents with regional offices in Denver, Colo.; Des Moines, Iowa; Lincoln, Neb.; Gainesville, Fla; and Sacramento, Calif. Allied has been a member of the Nationwide family of companies since 1998, and is responsible for Nationwide's independent agency system.

  • Regardless of the state you are licensed to work, you need to know that many new laws are being "proposed" all across the nation where the Public Insurance Adjuster is licensed. We mention this to our members so that they can be made aware of what is happening and what you can do to get involved with your profession. AAPIA is your advocate on a national level - we monitor all state legislatures and regulations as they appear and immediately review and comment on the efficacy and impact it may have on your profession.