Sunset Commission to Hear Input on Texas Department of Insurance Review

The Texas Sunset Advisory Commission is holding a public hearing June 24 and 25 to gather comments on the Sunset Commissioner Staff Report recommendations on the continuing governance of the Texas Department of Insurance and the Office of Public Insurance Counsel. The staff report, released in late May 2008, indicated that overall, TDI functions well but recommended tweaking the way the department handles insurance regulation.

The staff report also recommended that the consumer protection duties of the OPIC be folded into TDI.

Overall, the Sunset Commissioner Staff Report is a thorough examination of TDI and OPIC and identifies some issues which have been a concern to insurers and end users of insurance, according to Jerry Johns, president, Southwestern Insurance Information Service.

“File-and-use has not been as successful in Texas as it has in states where legislators enacted competitive regulatory environments, such as South Carolina and New Jersey, Illinois and Kansas,” he said.

“Insurers support the continuation of TDI and their regulation of companies for solvency and market conduct, but we have questions why full implementation of file-and-use has been become a reality,” Johns added.

The Texas Coalition for Affordable Insurance Solution (TCAIS), another insurer group, said it agrees with the staff findings — particularly the emphasis on the lack of transparency and predictability in TDI’s rate review process.

Responding to the staff report, TCAIS said “the question is not whether true market-based file-and-use is the right direction for Texas regulation, but rather how much potential we are losing as a result of the key findings of unpredictability, uncertainty, and lack of full implementation.

“A recent TDI report shows that the market has in fact improved under the file-and-use system; homeowners rates have declined an average of 13 percent and Texans now can shop for coverage and prices that fit their needs as 29 more insurance companies are competing for business in our state. A move to more consistently apply the current competitive file-and-use regulatory system and more clearly define TDI’s authority will provide greater market predictability and ensure Texans reap the benefits of a truly competitive marketplace.”

TDI’s self evaluation report to the Sunset Advisory Commission may be found online at http://www.sunset.state.tx.us/81streports/tdi/ser.pdf.

During the current public hearings the Sunset Commission will also hear comments regarding the Texas Department of Public Safety, which has been criticized for failures in protecting the state’s historic Governor’s Mansion from arson in early June.

Topics Texas Legislation