The Texas Legislature took the first of many steps in resolving the state’s insurance crisis with the naming of members to the House Insurance Committee and with the Senate’s initiation of hearings on insurance bills.
Insurance reform has been given emergency status and is at the top of the legislative agenda this session. Addressing House Speaker Tom Craddick’s selection of veteran legislators to lead the insurance committee, Donald Hanson, southwest regional manager for the National Association of Independent Insurers (NAII) said, “The legislators Speaker Craddick has chosen for the insurance committee are very knowledgeable regarding insurance issues. This is a positive step. The insurance committee will grapple with many complex issues affecting the future of the insurance marketplace in Texas. We are confident the committee will give all the reform bills a fair hearing and make sound decisions.”
The Senate Business and Commerce Committee moved quickly to begin addressing insurance legislation by approving SB 310 last week. This bill requires all insurers writing residential property insurance to make a one-time data report to the insurance commissioner for use in a report to the legislature on underwriting. This report requires that insurers include information related to the use of credit scoring and the methodologies used to determine a score.
“The committee is attempting to gather the information it needs to make an informed decision. We applaud their effort and will assist in providing information they need to make an appropriate decision. To help legislators put the Texas regulatory system into perspective, NAII has offered to provide the committee with information regarding the regulatory frameworks used in other states across the country,” Hanson said.
The Senate Business and Commerce Committee also received testimony but took no action on SB 14, which abolishes flex-band rating procedures and substitutes file and use procedure for personal automobile and residential property insurance rates. The bill would increase rate regulation of Lloyds and county mutual insurers in Texas.