Commercial auto deregulation was supposed to be a yawner for the 77th Legislature. Sure, there was opposition, but with the Texas Department of Insurance backing the measure, no one could have expected the fireworks display of emotion that heated up the House Insurance Committee meeting last Tuesday.
In short, Rep. Kim Brimer, R-Arlington, lost his cool. He left his seat, strode to the back of the committee hearing room and got in someone’s face. There was a high-school-locker-room standoff complete with profanity, chest butting and a pointing index finger. Brimer turned an angry red. More than one person in that room felt anxious about the moment. All this happened in the middle of testimony by Rep. David Counts, D-Knox City, against Brimer’s bill, House Bill 1195.
Rep. Counts was reiterating what several members of the Auto Insurance Agents of Texas had already said—that deregulating the forms and rates could make it more difficult for consumers to know what they are purchasing; that agents would be left open to more E&O exposure as they tried to learn 20 different commercial auto forms; and small businesses could end up with less coverage for the same price. The person that was on the receiving end of Brimer’s fury represented county mutual companies, which, of course, weighed in against the bill.
There had already been testimony from Insurance Commissioner Jose Montemayor and Bo Gilbert from the Independent Insurance Agents of Texas supporting the bill. Their reasons: bundling lines of business could eliminate gaps in coverages, consumers could purchase just one master policy, and companies could be more competitive in their pricing.
Despite what was actually said—what will turn up in the transcripts—what was actually being “discussed” was pretty basic. County mutuals and nonadmitted insurers, which have long enjoyed the privilege of being unregulated in terms of rate and form, don’t want additional competition in the commercial auto arena from every insurance company in the country. Insurance companies want to compete on a “level playing field” and are vying for that same privilege. The nonstandard auto market believes that diversity is vital to a healthy market and that the big players will bully the smaller regional players out of the way.
While there are legitimate concerns about protecting the consumer from their own ignorance about more complicated insurance transactions and about providing that same consumer with the most competitive insurance product available, these are topical conversations about something that runs much deeper. Which is why I’m intrigued about Rep. Brimer’s response. And more importantly about a bill that was supposed to be a homerun.
The pols told us this legislative session might not generate much more than a redistricting plan and some clean-up bills. Who knew we’d have a fireworks display before the session, or the Texas summer for that matter, even had a chance to heat up.
P.S. If you’re interested in listening to what goes on in the committee hearings, go to the Texas House of Representative’s site (www.house.state.tx.us), go to “Real Audio/Vidio Streams” and select either current or archived meetings. They have hours and hours of archived material for your listening pleasure.