by John Randolph, CEO
It gives me great pleasure to announce that the TLIE Board of Directors has declared a policyholder distribution of $2,750,000 payable to policyholders of record as of 5:00 P.M., November 30, 1999. This declaration marks the third consecutive year that TLIE has been able to return a portion of income to the policyholders. During this three year period a total of $8,250,000 has been returned to our insureds.
The Board of Directors, at their December 10, 1999 meeting, determined after a review of the company’s financial results for 1999 that a distribution of $2,750,000 was appropriate. TLIE’s financial status has never been stronger with assets in excess of $40 million and a projected surplus of $19 million by year-end after deducting taxes and the distribution. A.M. Best, the most highly recognized authority on insurance company ratings, in their annual review of TLIE stated: "the rating upgrade reflects the Exchange’s continued operating profitability, conservative operating strategy, commitment to reserve adequacy, and overall financial strength."
Those readers not insured by TLIE may be facing the unhappy prospect of being non-renewed by carriers that have decided to leave the market. We have seen and heard that several well-known professional liability insurance carriers have decided to withdraw from Texas or totally abandon this line of coverage. At this point we are unable to determine whether or not another liability crisis of similar magnitude to the 1984-1987 market is about to begin or whether we will see only segments of the Bar affected as occurred in the mid 1970’s and in 1993. However, there are a number of indications that premium rates are set to increase, terms are more restrictive and availability reduced. There are a variety of factors that could impact insurance availability for your firm, including; primary practice areas, firm size, location and past claim history. If another severe crisis develops in the mold of the 1984-87 period, the factors shown above will not make any difference because your carrier may decide to simply leave the market.
TLIE, on the other hand, continues to strive to increase the number and types of coverages available to the attorneys of Texas. During 1999 we worked with the Houston and Dallas lawyer referral services to provide a policy designed to meet the insurance requirements of those two services. TLIE has expanded the number of policy forms available to include programs for newly licensed attorneys, part-time attorneys and contract attorneys. We have modified the Standard Policy Form (P-9) to include a reimbursement provision for the costs (up to $10,000) incurred in defending against a grievance proceeding.
We here at TLIE hope you have a joyous and safe holiday.