Press Releases

FOR IMMEDIATE RELEASE

June 24, 2008

CONTACT: Beaman Floyd
(512) 731-9939 or bfloyd@tcais.org

CHANGES AT TDI SHOULD ALLOW CONTINUED MARKET DEVELOPMENT
TCAIS testifies at Sunset hearing on Texas Department of Insurance

Recommendations for changes at the Texas Department of Insurance (TDI) should ensure continued market development that benefits consumers, insurers and the broader Texas economy, the Texas Coalition for Affordable Insurance Solutions (TCAIS) testified Tuesday at a Sunset Advisory Commission hearing on TDI.

Since the Legislature passed insurance reforms in 2003, most Texans’ homeowners premiums have stabilized or lowered, even as home values have increased substantially. Twenty-nine more homeowners insurance companies are operating in Texas, and coverage choices and availability have increased for consumers, according to a TDI report.

“Although these reforms have helped improve Texas’ competitive market, the new regulatory system has not been fully allowed to work, as the Sunset staff report points out,” said Beaman Floyd, TCAIS executive director, who testified at the hearing. “More consistently applying the current competitive file-and-use regulatory system and more clearly defining the authority of the Department of Insurance will provide greater market predictability and ensure Texans reap the benefits of a truly competitive marketplace.”

In the TCAIS response to the Sunset staff report:

• TCAIS agrees that the rate review process at TDI lacks transparency and predictability. The insurance commissioner should have to demonstrate that the marketplace as a whole is not competitive before taking action on individual companies’rate filings.

• TCAIS agrees that the Texas Windstorm Insurance Association is at a critical juncture. Sunset staff recommendations will allow TWIA to employ its insurance expertise with proper oversight but without duplicative hearings and wasteful dual management, and will help properly focus the mission of TWIA as a market of last resort.

In his comments to the Sunset Commission, Floyd said, “At the end of the process, Texas needs a regulatory system that allows both companies and consumers to participate in the marketplace with the faith that they will be treated fairly and find good insurance values, whether they are buying the product or selling it.

“Texas needs to continue its long term movement toward a modern market based insurance system. Such a system will provide consumer choice, rating and forms freedom, less Texas Windstorm Insurance Association exposure, and focused regulation for solvency, market conduct, and fraud. A fully implemented market structure will encourage confidence, attract capital, and provide stability necessary for consumers and the broader Texas economy.”

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