Texas Coalition Promotes Competition, Consumer Protection

November 18, 2002

The Texas Coalition for Affordable Insurance Solutions (www.tcais.org ), whose membership includes a number of insurers operating in the state, urged the Texas Legislature to adopt regulatory reforms that promote competition and focus on consumers. To that end, the organization laid out seven guidelines for insurance regulation it believes will solve many of the insurance problems the state currently faces.

TCAIS notes that the pro-competition formula has worked already in well-regulated states such as Illinois and South Carolina. “Don’t just get mad, get it right,” is the message TCAIS wants legislators to consider when dealing with insurance issues during the upcoming legislative session. In addition to supporting pro-competition reforms, the coalition’s campaign effort includes consumer education, media outreach and advertising.

Among the seven guidelines for improving the regulatory structure in Texas are requirements that:

• All insurance companies, including Lloyds and reciprocals, file rates or rate changes and policy forms with the Texas Department of Insurance (TDI).
• TDI authority to disapprove a company’s policy form on a prospective basis and order a company or companies to discontinue to use a form if it is found to violate certain provisions in the Insurance Code.
• Consumer protections re: market conduct and solvency requirements.
• TDI will implement the Texas FAIR Plan to ensure that all Texans have access to homeowners insurance.

“The regulatory system TCAIS is proposing will allow the Commissioner to focus on market conduct practices and other consumer protections while providing insurance companies the opportunity to compete,” said Beaman Floyd, director of TCAIS. “We believe a stable regulatory climate will encourage more insurance companies to enter the Texas market and offer Texans a choice of a variety of products and services at competitive rates.”

In addition to proposed regulatory reforms, TCAIS is recommending that the Texas Legislature create an oversight committee to monitor the activities of the state’s evolving insurance market.

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