During the extended Texas legislative session, lawmakers passed an important bill that provides more protection from the rampant storm chasers who often prey on homeowners following major storms. “After many storms, some lawyers file lawsuits against insurance companies before an insurance claim is even filed by the homeowner,” said Jana Randolph, a Germania Claims unit manager in the Dallas- Fort Worth area. “These lawsuits can delay the settlement of a claim for two years or more, meaning repairs can’t be done and homeowners are inconvenienced eight times as long as they would have been had they just filed the claim and worked with the insurer. But unscrupulous lawyers have a charming way of convincing people that insurance companies are trying to cheat them. In fact, it has often been the lawyers who stood to gain the most from these frivolous lawsuits.” Effective Sept. 1, 2017, the “hailstorm bill” adds several new provisions to the Texas Insurance Code affecting first-party property insurance claims. The bill creates a new Chapter 542A for weather-related claims involving the “forces of nature,” including earthquake or earth tremor, wildfire, flood, tornado, lightning, hurricane, hail, wind, snowstorm or rainstorm. The new code provisions offer several benefits to Germania members: • A policyholder who makes a claim against an insurer must provide a pre-suit notice to the carrier at least 61 days before filing a lawsuit. The letter has to state a specific amount of damages and attorney fees incurred to date. “This gives insurers, homeowners and contractors an opportunity to resolve any disputes about the estimates or claim without a protracted waiting period,” Randolph said. • The percentage of the settlement fee that attorneys can earn has been limited in the new legislation, making frivolous and broad- sweeping litigation less appealing to opportunistic lawyers. If the pre-suit demand proves to be excessive as compared to the damages recovered at trial, the attorneys’ fees will be adjusted accordingly. • Even though Germania settles most claims without any litigation, the new legislation stands to help the entire insurance industry in Texas. “By reducing our internal legal costs and attorney-fee payouts, Germania will members benefit from lower costs of doing business,” Randolph said. A side effect of the legislation may be fewer blaring commercials, billboards and fliers from trial and personal injury lawyers, she said. “These distractions paint insurance companies in a bad light,” Randolph said. New‘Hailstorm Bill’Makes a Dent in Lawsuit Abuse
Germania FarmMutual Insurance Association and Subsidiaries CONSOLIDATED BALANCE SHEET As of December 31, 2016 (unaudited)
Admitted Assets Cash and Investments Real Estate and Equipment Premiums Receivable Accrued Investment Income Reinsurance Recoverable Net Deferred Tax Asset Federal Income Tax Recoverable
$459,042,764 4,821,026 115,200,420 3,663,143
14,576,273 22,103,225
4,557,908 5,480,208 $629,444,967
Other Assets Total Assets
Liabilities and Surplus Unearned Premiums Loss and Loss Adjustment Expenses Notes Payable Life Future Policy Benefits
$211,598,055 86,217,767 10,123,198 75,203,354 46,717,764 429,860,138 199,584,829 $629,444,967
Other Liabilities Total Liabilities Policyholders’ Surplus Total Liabilities and Surplus
CONSOLIDATED INCOME STATEMENT For the year ended December 31, 2016 (unaudited)
$398,840,722 10,048,485 388,792,237 245,732,667 45,691,945 106,346,558 4,820,440 402,591,610
Net Premiums Written Change in Unearned Premiums Net Premiums Earned Net Losses Incurred Loss Expenses Incurred Underwriting Expenses Incurred Increase in Life Future Policy Benefits Net Losses and Expenses Incurred
(13,799,373)
Underwriting Loss
14,997,591
Net Investment Income
1,502,358 2,700,576 (2,998,506) $5,699,082
Other Income Net Income before Taxes Federal Income Taxes Net Income
GERMANIA FARM MUTUAL INSURANCE ASSOCIATION CLAIMS PAID BY PERIL
Storm
142,583,510 24,275,181 16,718,619
Fire
Water Theft Other Total
2,244,149 6,615,612
192,437,070
6 | Germania Today
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