Texas Attorney General Candidates Spar on Insurance

June 27, 2002

Texas attorney general candidates Kirk Watson, Democrat, and Greg Abbott, Republican, have each unveiled plans to address the state’s homeowners insurance market crisis.

The Austin American Statesman reports that Abbott, a former Texas Supreme Court justice who now consults for a Houston law firm representing insurers, considers mold damage claims to be the primary reason for increasing homeowners’ rates. He advocates a targeted focus on insurance companies that mishandle mold claims and remediators engaged in fraud and inflating prices. In addition, Abbott asserts he will investigate carriers that engage in false advertising and sales practices, that tie homeowners rates to the purchase of auto policies, and that charge higher rates to policyholders with bad credit histories.

Watson, a former mayor of Austin and a lawyer who has taken insurers to court in the past, considers the crisis as too complex to be blamed squarely on excessive mold claims, and to be dealt with solely through the attorney general’s office. Watson proposes investigating carriers’ use of credit scoring like Abbott; he also intends to lobby the Texas Legislature to change state law to require carriers to obtain approval prior to raising rates. Watson advocates eliminating loopholes that have enabled many insurers to write homeowners policies through unregulated units. In addition, the candidate proposes establishing a joint oversight committee with the Texas insurance commissioner consisting of state officials, consumer groups, and experts in order to monitor the homeowners and medical insurance markets.

Abbott has derided Watson’s plan as too bureaucratic, indicative of the Democrat’s ties to plaintiff attorneys. He also said setting up a prior approval system was the responsibility of the Legislature, not the attorney general.

Watson has pointed out, conversely, that Abbott’s close relationship with insurers compromises his ability to effectively contend with the crisis. He points to the Republican’s insurance proposal as evidence of this, saying it lacks real teeth.

The Democratic candidate also pointed out that the Web site of the law firm at which Abbott consults, Bracewell & Patterson advertises its success representing insurance companies in court and before government agencies, including the attorney general’s office.

Abbott claims that if elected, he will follow the example of current attorney general John Cornyn, who also worked for a large law firm prior to his election, to resolve conflicts of interest. However, Abbott has stated he doesn’t know exactly how Cornyn resolved his conflict of interest issues.

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