June 29, 2012 - On Tuesday, June 26, Danny Phillips, a Colleyville resident and owner of the Diamond P Longhorn Ranch in Lindale, was elected to the Board of Directors of Texas Mutual Insurance Company, the state’s leading provider of workers’ compensation insurance. Phillips was elected unanimously at the company’s annual policyholder meeting.
In addition to owning the Diamond P Ranch, Phillips manages his own financial investments and serves on the board of a number of community and higher education organizations. He is currently the board chairman for the Fortress Youth Development Center in Fort Worth, Texas. He also serves on the Board of Regents at Pepperdine University in Malibu, Calif., and on the investment board of Abilene Christian University in Abilene, Texas. Additionally, Phillips is a member of the Board of Directors for Taigan.com and Ministry Ventures.
After starting his career as a certified public accountant, Phillips served in various financial and executive roles at Harken Energy Corporation, Aloha Petroleum and AdvancePCS, among others. At AdvancePCS, Phillips—as the chief financial officer—helped grow the firm from a small, privately owned company into a Fortune 500 corporation that became the largest provider of pharmacy benefit management services in the nation.
Phillips is a graduate of Abilene Christian University, where he earned a Bachelor of Business Administration degree in accounting.
June 22, 2012 - The Supreme Court of Texas issued a landmark decision today in Texas Mutual Insurance Company v. Timothy J. Ruttiger that strengthens a law affecting millions of Texans—the Workers’ Compensation Act—and found that a bad faith cause of action is inconsistent with the current workers’ compensation system.
In a 5-4 decision, the Court overruled its 1988 Aranda decision that had created the bad faith claims-handling tort in workers’ compensation.
“The Supreme Court has acted with courage and integrity by upholding the remedies and protections that the Legislature has granted to injured workers,” Mary Barrow Nichols, General Counsel and Senior Vice President for Texas Mutual, said. “This decision is fundamental to the health of the entire workers’ comp system.”
When the Ruttiger case first came to the courts in 2004, lawsuits claiming “bad faith” against all insurance carriers, Texas Mutual included, were on the rise. Texas Mutual disputed Mr. Ruttiger’s claim for an on-the-job injury because his employer reported that he was hurt at a non work-related softball game. Texas Mutual ultimately entered into a compromise agreement with Mr. Ruttiger over the claim.
In 2006, a trial court found that the company’s adjuster had acted in “bad faith” by believing the employer instead of Mr. Ruttiger. The court awarded money to Mr. Ruttiger in excess of the amounts Texas Mutual had already paid him to cover his medical costs and replace his wages. He was awarded additional money for his “mental anguish over having his claim disputed.”
The First Court of Appeals in Houston upheld the original decision in 2008, and Texas Mutual appealed to the Supreme Court. In August 2011, the Supreme Court of Texas reversed the Houston Court of Appeals decision and rendered judgment that Mr. Ruttiger take nothing on his Insurance Code and Texas Deceptive Trade Practices Act claims. The Court also remanded the plaintiff’s common law good faith and fair dealing claims to the Houston Court of Appeals for further consideration.
Both sides requested a rehearing, suggesting that the Court reconsider fully the question of whether the 1989 overhaul of the Texas workers’ compensation system “eliminated the need for” a common law cause of action for breach of the duty of good faith and fair dealing. The requests were granted by the Court on Feb. 17, 2012.
In his concurring opinion, Justice Don R. Willett explained as follows: "[T]he continued existence of bad-faith claims will subvert the Legislature's meticulous soup-to-nuts system, one augmented by an immense regulatory and adjudicatory framework that, taken together, now regulates virtually every aspect of how a carrier handles a workers' comp matter. . . [T]he inherently fuzzy nature of the bad-faith tort has a tendency to produce conflicting liability standards inconsistent with the Legislature's statutory approach to carrier malfeasance and accountability.”
Justice Willett’s opinion continues: “I think it unwise to invite these potential complications, particularly in an area so imbued with public policy trade-offs, and where the Legislature has specifically addressed our concerns over how comp claims are processed. Aranda was rooted in specific claims-handling inequities in the pre-1989 comp system, inequities the Legislature has re-balanced. Accordingly, in light of the Legislature's hermetic workers' compensation regime, the time has come for the Court—exercising its authority to define and delimit common-law remedies—to overrule Aranda, a judicial gap-filler whose underlying rationale no longer exists."
To see the full text of the decision, please visit www.supreme.courts.state.tx.us/historical/062212.asp.
May 30, 2012 - Gov. Rick Perry recently appointed John Swanson of Frisco to the Board of Directors of Texas Mutual Insurance Company, the state’s leading provider of workers’ compensation insurance. Swanson’s term began on May 15, 2012, and will expire on July 1, 2017.
Members of Texas Mutual’s Board of Directors represent a diverse mix of Texas industries and regions. The governor, with the advice and consent of the Texas Senate, appoints five of the nine directors, including the chair. Policyholders elect the other four directors.
Swanson has been involved in the oil and gas industry since 1981 and has nearly 20 years of corporate finance experience. He is currently president and chief executive officer of Republic Energy, Inc., where he has worked since 2001. He is a member of the Independent Petroleum Association of America, past technical reviewer of the Society of Petroleum Engineers and a past trainer for Junior Achievement of Midland.
Swanson earned a bachelor’s degree from the University of Colorado at Boulder in 1981 and a Master of Business Administration from the University of Dallas in 1991.
May 23, 2012 - This afternoon, Texas Mutual Insurance Company’s board of directors approved the company’s plan to distribute $150 million in workers’ compensation dividends. This marks the 14th consecutive year the board has approved a dividend distribution to qualifying policyholder owners.
By the end of 2012, Texas Mutual will have paid $1.2 billion in dividends. The majority of that total – more than $1 billion – will have been paid since 2005.
Dividends reward loyal policyholder owners who share Texas Mutual’s commitment to preventing workplace accidents and helping injured workers get back on the job.
“As a mutual insurance company, our responsibility is to our policyholders,” said Bob Barnes, chairman of Texas Mutual’s board of directors. “They own the company, and this money belongs to them. We are proud to share Texas Mutual’s success with those who have contributed to that success.”
Texas Mutual plans to begin distributing dividends in late July. Dividends are based largely on policyholders’ premium sizes, workplace safety records and histories with the company.
“Our status as a mutual company gives us the freedom to focus on what matters most: preventing workplace accidents and their associated costs,” said Wright. “Texas Mutual is fortunate to have more than 51,000 owners who share our vision. I hope this return on their investments will keep their businesses strong far into the future.”
Wright noted that Texas Mutual cannot guarantee future dividends, and the 2012 dividend plan requires Texas Department of Insurance approval.
May 11, 2012 - Texas Mutual Insurance Company announced today that a Travis County grand jury indicted Michael T. Douglas of Denton, Texas on aggravated perjury charges. The indictment alleges that Douglas, a medical technician, presented false testimony on matters relating to the investigation of his sister, Barbara A. Douglas, and her company, Western Medical Evaluators.
Barbara A. Douglas, her company and her father, Howard T. Douglas, III M.D., were indicted in August 2010 on felony workers’ compensation fraud-related charges. Western Medical Evaluators provided functional capacity evaluations to injured workers in Texas.
Those indictments alleged that between February 2007 and July 2008, Barbara A. Douglas, Howard T. Douglas, III M.D. and Western Medical Evaluators overbilled Texas Mutual for the time taken to perform evaluations.
The Western Medical Evaluators, Barbara Douglas and Howard Douglas investigations were part of the Texas Mutual zero tolerance for fraud policy. Texas Mutual maintains three teams of investigators permanently assigned to investigate every report of suspected fraud.
Note: A grand jury indictment is a formal accusation - not a conviction - of criminal conduct.
May 1, 2012 - Texas Mutual Insurance Company announced today that a Travis County grand jury indicted Howard T. Douglas, III, M.D. of Hurst and his company, North Texas Medical Evaluators of Carrollton, on felony workers’ compensation fraud-related charges.
The indictments were the results of an investigation conducted by Texas Mutual.
North Texas Medical Evaluators provided functional capacity evaluations to injured workers in Texas. The indictments allege that, between December 2007 and December 2009, Douglas and North Texas Medical Evaluators overbilled Texas Mutual for the time taken to perform evaluations.
Douglas was indicted in August 2010 for his part in a similar scheme involving Western Medical Evaluators and his daughter, Barbara A. Douglas of Denton.
The North Texas Medical Evaluators and Western Medical Evaluators investigations were part of the Texas Mutual zero tolerance for fraud policy. Texas Mutual maintains three teams of investigators permanently assigned to investigate every report of suspected fraud.
Note: A grand jury indictment is a formal accusation - not a conviction - of criminal conduct.
April 27, 2012 - Texas Mutual Insurance Company announced today that the Texas Schools Group and Texas Association of Manufacturers safety groups earned a combined $1,094,336 in dividends. The workers’ compensation dividends were based largely on each group’s overall loss ratio.
The largest dividend, $780,305, went to the Texas Association of Manufacturers safety group. The group has earned $3.4 million in Texas Mutual dividends since 2008.
Members of the Texas Schools Group earned a $314,031 dividend, a 61 percent increase over their 2011 dividend.
Unlike publicly traded insurance companies, mutual insurance companies are owned by their policyholders. Dividends allow Texas Mutual to share its financial success with its policyholder owners.
In addition to potential dividends, safety group members get discounts on their workers’ compensation premiums. They also have access to workplace safety materials designed for their operations.
Texas Mutual notes that past dividends are not a guarantee of future dividends, and the Texas Department of Insurance must approve all dividends.