FOR IMMEDIATE RELEASE 03/12/2009
ANCHIA, OTHER LAWMAKERS JOIN WITH CONSUMER & SENIOR GROUPS FOR HOMEOWNERS INSURANCE REFORM
AUSTIN – State Representative Rafael Anchia (Dallas) and other lawmakers endorsed comprehensive homeowners insurance reforms today at a press conference in the State Capitol. They were joined by representatives of Texas Watch, a leading consumer group active on insurance issues, and AARP Texas, which represents 2.4 million Texas members.
A poll of likely voters released last month by Texas Watch shows strong support for insurance reform. The results show a deep dissatisfaction with the state of the current insurance market.
Among the reforms supported by the legislators is a measure requiring insurance companies to justify rate increases before they pass them on to their customers. Under the current system, insurance companies do not have to obtain approval from the state insurance commissioner for rate hikes.
Legislation filed by Senators Leticia Van de Putte (SB 91), Rodney Ellis (SB 106), Juan Hinojosa (SB 264) and Rep. Rafael Anchia (HB 1594), would create a “prior approval” system for rate changes. Under the current system, insurance companies do not have to obtain approval from the state insurance commissioner for rate hikes. The legislation is strongly supported by Texas Watch and AARP Texas, and was supported by 75% of likely voters polled in a scientific survey conducted by pollster Dr. David Hill.
"We have to change this policy of allowing companies to just go ahead and raise rates on consumers, then ask for permission later" said Anchia, adding, "All the polling data shows that people are fed up with the current system, and with these bills, we hope to change that."
Legislation filed by Senator Eddie Lucio, Jr. (SB 102) and Rep. Elliott Naishtat (HB 340) would require insurers to offer standard forms on homeowner policies. Senator Lucio said, "One of a consumer's best tools is information. Senate Bill 102 standardizes policy forms to make it easier for consumers to find the most affordable homeowners' insurance. Comparison shopping is an essential part of being a smart buyer". Also referring to the benefit of having standard insurance forms, Representative Naishtat said, "This would help to ensure that consumers are able to make apples-to-apples comparisons on policies" adding, "This is critical to protecting the biggest investment most people ever make--which is their investment in their homes." This measure was supported by 67% of those polled.
Senator Lucio has also filed SB 103, which would limit the range of rates an insurance company can charge within a given county. "The fact is, we need to hold insurers accountable. It's not good policy to let insurers charge households whatever they want without justification," said Senator Lucio, referring to the bill. He has also introduced SB 1372, which would penalize companies that pull out of the state by imposing a 5-year ban on re-entry.
Bills filed by Senator Rodney Ellis (SB 110) and Rep. Armando Walle (HB 1157) would ban the use of credit scores by insurers when setting rates. This was supported by 69% of the poll participants. "The practice of credit scoring disproportionately impacts low and moderate income Texans," said Rep. Walle. He continued, "We must ban credit scoring to help protect Texas families during these tough economic times."
Bills filed by Representatives Mark Homer (HB 173) and Marc Veasey (HB 984) would make the insurance commissioner an elected position. This measure was supported by 73% of those polled. "Texans have paid the highest insurance rates in the nation for far too long", said Rep. Veasey, adding, "The reforms the legislature is considering this year, including changing the insurance commissioner from an appointed position to an elected one, will help bring costs for Texas families in line with the rest of the nation."
Contact: Tim Dickey (512) 463-0746