AUSTIN (KXAN) — The Travis County District Attorney has postponed a controversial agreement with Texas Mutual Insurance Company (TMI).
District Attorney Rosemary Lehmberg says the agreement between her office and TMI is “expressly authorized by the Texas Insurance Code and is, therefore, a legal contract.”
However, she says, “understanding the perception questions that have been raised, my office is exploring how to continue our important work in the area of workers’ compensation insurance fraud.”
Questions were raised last month after it was revealed the private insurance company was paying the District Attorney’s office to take fraud cases to court.
The company paid for a four-person unit to prosecute people accused of defrauding the company. Texas Mutual was created by the legislature in 1991 to solve a crisis in worker’s compensation insurance.
The District Attorney’s Office and TMI have agreed to postpone the automatic renewal of their agreement scheduled for October 1. Texas Mutual will pay the operating expenses of the fraud unit through the end of the year. This will provide them time to explore alternatives, Lehmberg says.
The DA adds that she will ask a group of public officials to work with her to evaluate funding options and work through the issues.
An investigation by the Texas Tribune showed there was particular concern that the agreement was “pay to play” system set up by the Texas legislature.