Texas Insurance Commissioner Jose Montemayor submitted a written report to Texas legislators indicating needed changes in laws relating to regulation of the insurance industry. The Biennial report, required under Section 32.022 of the Insurance Code, summarizes the changes in the laws that the commissioner believes are needed for the Texas Department of Insurance (TDI) to continue to effectively regulate the industry and provides an overview of the insurance industry.
According to Montemayor, several of the recommendations included in the report address problems brought to light by the mold crisis experienced since the last session of the Texas Legislature. Those changes include revising the system for regulating rates charged by insurers writing personal lines; licensing of persons involved in handling mold claims; establishing specific time frames for insurers to respond to water claims; and broadening the applicability of laws governing insurers’ withdrawal from a line of business such as homeowners insurance.
The report also contains recommendations for changing the method of rate and form regulation in other casualty lines such as commercial automobile, inland marine insurance and fidelity and surety bonds, and requiring that the rates filed by the Texas Medical Liability Trust, the largest Texas writer of medical professional liability insurance, comply with commonly used rate standards. Montemayor stated that the recommendations provide flexibility for insurers to respond to market conditions while preserving the commissioner’s and department’s authority to ensure that rates charged to Texas insurance consumers are just, reasonable, adequate, and neither excessive nor unfairly discriminatory for the risks to which they apply.
The report also includes recommendations: to facilitate the prompt payment of physicians and other health care providers; pertaining to the operation of the Texas Health Insurance Risk Pool; to standardize the department’s current rulemaking authority; to provide guidance to insurers and protections to consumers regarding the use of credit scoring and credit reports in underwriting and rating; to expand eligibility for the JUA; and to improve the commissioner’s ability to establish a residual market facility for homeowners insurance. It also contains a recommendation regarding the minimum non-forfeiture rate of interest for individual deferred annuities.
Montemayor indicated that TDI staff is developing the recommendations into bill draft form to assist the Legislature in preparing legislation, should the Legislature choose to formally consider them. The final drafts can be obtained by contacting the Government Relations Division of the department at (512) 463-6651.
The report is available on the department’s Web site at www.tdi.state.tx.us.
Topics Texas Legislation
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