Rejected Emails Cause Headaches for Texas Insurance Regulators

The Texas Department of Insurance recently was inundated by hundreds of emails regarding homeowner insurance rates, and the department now has the task of finding out why the majority of them were rejected by agency’s computer servers.

TDI reported that it began receiving the emails on July 13, which were addressed to Commissioner Eleanor Kitzman. After hundreds of emails went through, the state agency’s email server apparently began rejecting the rest.

“The messages were identical and contained comments and suggestions concerning the state of the property insurance marketplace in Texas. Commissioner Kitzman reviewed these suggestions with her staff on July 17, and is in the process of gathering the necessary data and information to respond to each consumer in a substantive and comprehensive manner,” the department’s release stated.

Alex Winslow with Texas Watch, a consumer group that initiated the mass email campaign, said more than 300 emails went through, and at least 900 others were rejected, according to Associated Press reports.

“Insurance can be complex, and meaningful long-term solutions require thoughtful consideration and collaboration,” the department release continued. “TDI welcomes all feedback from the Texas insurance consumers we serve and endeavors to respond to all communications as quickly as possible.”

Winslow shared the content of the email with Insurance Journal. It responds to comments made by Commissioner Kitzman during a hearing held by the Senate Committee on Business and Commerce. Kitzman indicated in that testimony that there “does not seem to be a ‘silver bullet here'” to provide immediate relief for the high homeowner insurance rates in the state.

The email in question is posted below:

“Dear Commissioner Kitzman:

It is troubling that you claim that there are no immediate solutions that would help consumers with high cost, low coverage home insurance policies.

Nearly 10 years ago, Texans were promised relief which has never materialized. Now, you tell us that we have to wait for years — or decades — longer before our families might get some relief. And, you say there is nothing you can do to help us right now.

I urge you to consider commonsense, market-based solutions to improve the market for policyholders:

— Empower consumers to generate real price competition by requiring carriers to offer a standard policy, allowing consumers to make meaningful apples-to-apples comparisons.

— Stop insurance companies from shifting more of the burden onto consumers by continually raising deductibles.

— Make the market more transparent for consumers by requiring insurance companies to clearly state what is and is not covered, disclose the true dollar-amount of deductibles, and provide easy access to review the current policy and endorsements in effect.

— Standardize insurance rate filings so that carriers are required to give all relevant information and justifications for rate hikes with their initial filing.

— End exotic off-shore reinsurance arrangements that allow insurance companies to pad their profits.

— Rein in excessive underwriting profits and administrative costs from insurance companies.

— Require insurance carriers to rely on legitimate long-term loss experience when estimating weather-related risks. One bad storm does not justify a steep rate hike.

— Closely review the entire market to ensure current rates are justified.

These are just a few recommendations that would provide immediate relief to Texas families.”

Ware Wendell, Texas Watch director of legislative affairs, also spoke to state senators at the July 10 Business and Commerce Committee hearing.

“In order to lower rates, we believe that consumers should be empowered to generate real price competition. The best way to do this is to simplify the marketplace so that people can easily shop,” Wendell said. “As it stands today, due to the many different forms and endorsements, consumers cannot make apples-to-apples comparisons. The option of a standard policy form would serve as a benchmark, against which they could compare other policies from a single carrier or compare one carrier to another. They may ultimately choose a different product if it better suits their individual needs, but they will have been able to make a meaningful choice.

“Once consumers are given an opportunity to make smart decisions, they will force carriers to compete for their business. Basic market economics tells us that will lead to lower prices and better service for consumers.”

Texas Watch has also taken TDI to task for canceling hearings on the implementation of changes to the Texas Windstorm Insurance Association mandated in legislation state lawmakers approved in 2011.

TDI canceled several hearings that had been scheduled for July 12 and 13 to consider implementation of certain provisions of HB 3, which was passed last year.

The agency said the meetings were canceled “due to apparent confusion among some interested parties as to the nature and purpose of the public hearings. … First and foremost, none of the proposed rules relate to or impact rates charged to TWIA policyholders,” the agency’s cancellation notice stated.

However, according to the consumer advocacy group, Kitzman has the responsibility to provide a forum for input from coastal insurance consumers.

“TWIA is in a time of transition that will severely impact the lives and livelihoods of families and businesses up and down the Texas coast. Insurance Commissioner Eleanor Kitzman’s job is to ensure as smooth a transition as possible. However, the commissioner has decided to skip an opportunity to address the concerns of TWIA’s policyholders. This sends the wrong message,” Texas Watch maintained in a statement published on its website.

“Coastal legislators have rightly called on Kitzman to attend. She has an obligation to make herself available to the public to answer questions about how TDI is implementing changes made by lawmakers last year.””.

TWIA, which currently is under supervision of TDI, also cancelled a July 23 meeting of its actuarial and underwriting, apparently due to much of the confusion and push back over planned rate increases.

A proposal by the actuarial and underwriting committee that TWIA file for a 5 percent rate increase in August to become effective Jan. 1, 2012, was approved by TWIA’s board of directors at a meeting on May 1.

At that time the board declined, however, to vote on a proposal from the association’s actuarial underwriting committee that the board file in June for an overall rate increase of 4.7 percent with an effective date of Oct. 1.

TWIA’s board of directors is scheduled to meet on Aug. 7 in Galveston.

Topics Carriers Texas Legislation