ISO, NATIONWIDE PRODUCTS OKAYED
The Texas Department of Insurance (TDI) has cleared the way for insurers to provide expanded homeowners coverage options by approving both the Insurance Services Office Inc.'s (ISO) Homeowners 2000 program and new homeowners, condominium and tenants policies offered by Nationwide Insurance Company. With the addition of Texas, ISO's Homeowners 2000 program has been accepted by insurance regulators in 43 ISO jurisdictions. Approved were ISO's six policy forms and 93 coverage endorsements for homeowners and mobile homeowners. The department stipulated that insurers using the ISO forms must file their initial rates and rate changes for policies written through any of their Lloyd's companies or reciprocal exchanges with the department on an informational basis for a period of two years. ISO's Homeowners 3-Special Form is analogous to Texas's HO-B policy form. While the ISO policy form covers water damage from sudden or accidental discharge, it does not cover losses caused by constant or repeated seepage or leakage of water from a household appliance or from a sewer or drain backup. Policyholders' savings on insurance would vary by geographic locations of homes and coverages chosen. New applicants and existing policyholders will also be able to select ISO endorsements that cover dwelling foundation damage, and water damage from constant or repeated seepage or leakage of water from a household appliance or from a sewer or drain backup. Nationwide's approved policies are similar to the forms it uses in other states. The policies allow customers to choose basic coverage similar to other states at a savings, or to add coverage for losses caused by foundation damage, water damage caused by seepage and leakage, or mold testing and remediation. Policies then would be priced accordingly. The company said that consumers choosing coverage similar to other states, without the added mold, water and foundation coverage endorsements, could save between 17 percent and 56 percent from current full coverage. Those who move from current basic coverage to the Nationwide basic policy could realize savings between 8 percent and 27 percent. The average premium savings on the Nationwide basic policy will be about 16 percent. Nationwide's current Texas customers would be moved to the new policy as their existing policies come up for renewal.
STATE FARM GETS INCREASES IN LA.
The Louisiana Insurance Rating Commission approved a 14 percent increase in automobile insurance rates for State Farm Mutual Automobile Insurance Co. and a 19 percent rate hike for State Farm Fire & Casualty Co. The increases were less than originally sought by the State Farm Group companies. According to A.M. Best, State Farm Mutual, which covers about 91 percent of the company's 1.05 million auto insurance customers, had requested a 16 percent rate hike. The remainder of State Farm's Louisiana auto customers, mostly high-risk drivers, are covered by State Farm Fire & Casualty, which sought a 20.9 percent increase in rates.
COURT UPHOLDS DOWNS WC RULING
The Texas Supreme Court denied a motion for rehearing in the case of Downs v. Continental Casualty Co., Cause No. 04-99-00111-CV, letting stand a previous decision in the case, which concerns the timing of a carrier's notice of intent to pay or refusal to pay benefits after receiving notice of an injury. According to the Texas Workers' Compensation Commission, the 4th Court of Appeals in San Antonio issued a revised decision in Downs, holding that "a carrier waives its right to deny compensability if it fails to comply with section 409.021(a) of the Texas Labor Code by either agreeing to begin the payment of benefits or giving written notice of its refusal to pay within seven ('7') days after receiving written notice of an injury." The Supreme Court's decision not to consider the Motion for Rehearing filed by the insurance carrier means the requirement to adhere to a 7 day "pay or dispute" provision is now final. All previous advisories issued by TWCC regarding this issue are superseded by its current advisory and the Supreme Court decision. For more information on this case, visit the TWCC website at www.twcc.state.tx.us.
PIA/TIP THINKS LEICHT IS BEST
Professional Insurance Agents of Texas, also known as Texas Insurance Professionals (PIA/TIP), named Leicht General Agency the "Managing General Agency of the Year 2001-02," at the association's meeting in Houston on September 17. Marshall B. Leicht, Jr. accepted the award on behalf of the agency. Leicht General Agency maintains offices in Houston and Dallas.
APPOINTED INS. HEAD FOR LA.'
Louisiana Governor Bob Foster recently asked visitors to the Governor's Web site to vote on whether the state's insurance commissioner should be an appointed official or an elected one. Currently the insurance commissioner is elected. According to the New Orleans Times-Picayune, on his weekly radio call-in show, "Live Mike," Foster proposed changing that status out of his conviction that an appointed commissioner would be less vulnerable to the political pressures. The state's last three elected commissioners have been convicted of crimes. Suspended Commissioner Jim Brown is asking the 5th Circuit Court of Appeals in New Orleans to reconsider its recent ruling upholding Brown's conviction on charges of lying to an FBI agent when he was interviewed about the state's settlement with a failed insurance company. The Court sentenced Brown to six months in prison, but he has remained free during the appeal. Former Commissioner Doug Green, who served before Brown, is serving a 25-year prison sentence as the result of a 1991 money laundering conviction. Green's predecessor, Sherman Bernard, was sentenced to 41 months in prison after being convicted of taking payoffs while in office. A two-thirds vote of the legislature is required in order to abolish the elected office. For his part, Acting Insurance Commissioner Tom Wooley opposes Foster's idea of making the position an appointed one, on grounds that such action would put too much power in the hands of the governor. Wooley asserted that if the legislature makes such a change, it should require the appointment to be made by a panel of three judges, as is done in Virginia.
TX MAN GETS TIME
James Webb of Houston was sentenced to 18 months in state jail by the Travis County, Texas, District Court after pleading guilty to charges that he defrauded the workers' compensation system by collecting workers' comp benefits for injuries he received while in jail. According to the Texas Mutual Insurance Company, the court also ordered Webb to pay $3,560 in restitution to Texas Mutual. Webb began collecting Temporary Income Benefits (TIBs) for a knee injury he claimed occurred while he was working for Texas Mutual policyholder Coastal Personnel Consultants in Houston, however an investigation revealed that the injury actually occurred while Webb was serving time in the Jefferson County Jail on an unrelated charge. Allegedly, Webb also collected TIBs after returning to work for another Houston company, Industrial Maintenance Corporation. Travis County Assistant District Attorney Donna Crosby prosecuted the case.
TDI TO HELP HOMEOWNERS
The Texas Department of Insurance is launching a new program and Web site, www.helpinsure.com, designed to help consumers find homeowners insurance. Governor Rick Perry directed TDI in August to find new ways for consumers and insurance companies to connect in the existing marketplace. The marketing campaign to promote the Helpinsure.com program, which is the result of Perry's directive, will consist of both print and radio public service announcements. The program is designed to provide Texans with three distinct levels of help: 1.) Consumers may sign-up by providing information about their homeowners' insurance needs. Helpinsure.com will then provide this information to insurance providers and independent agents who are selling homeowners policies; 2.) Helpinsure.com will provide consumers a listing of current providers of homeowners insurance in Texas and contact information and; 3.) Helpinsure.com will provide an extensive learning center to answer consumer questions about homeowners insurance. It includes TDI's 2002 rate guide, smart shopping tips, advice, information columns, and complaint information. TDI is working with and encouraging the insurance industry to participate in this new program. Insurers are not required to accept applicants and may follow their own underwriting standards when reviewing any applicant participating in the program. Information provided by consumers will be secure and can be accessed only by insurance agents and companies. The program's toll free telephone number is (866) 695-6873.
