Legislators propose making Texas insurance commissioner an elected position
March 3rd, 2009
Dallas Morning News
Several lawmakers Tuesday pitched insurance reform proposals that they said would better protect consumers and help stabilize rates in the wake of a new study affirming Texas’ standing as the most expensive home insurance market.
Three House members made their case for Texas to switch to an elected insurance commissioner during a hearing of the House Insurance
In the Senate, the chairwoman of the Senate Democratic Caucus said the new insurance rate study provides further evidence that Texas needs better control of rates, specifically by requiring companies to get prior state approval before increasing premiums.
“This is an impartial study that validates what many homeowners have been telling us, that they haven’t seen any relief from high insurance rates,” said Sen. Leticia Van de Putte, D-San Antonio, referring to the report from the National Association of Insurance Commissioners.
“We are basically paying the highest premiums and providing the biggest profits while other states have their rates more reasonably aligned. Texans want value for their insurance policy, but we are paying more to get less. And that’s not fair for Texans.”
Joe Woods of the Property and Casualty Insurers Association of America, testifying before the House Insurance Committee, questioned the validity of the NAIC study – which has shown Texas having the highest home insurance rates for several years in a row.
Woods said it was unfair to compare Texas rates with other states because of the different types of policies sold in Texas and also because some states don’t report numbers to the NAIC that would make their average rates higher.
“It is dangerous to use this study to make public policy,” he told the House panel. “There are problems with it.”
The committee also heard from the three House members who have filed bills to switch the state insurance commissioner to an elected official. Currently, the commissioner is appointed by the governor.
Under the proposals, the insurance commissioner would be elected statewide beginning in 2010, along with the governor, lieutenant governor and other statewide officials.
“The person who regulates the insurance industry should be accountable to the citizens who buy insurance policies,” said Rep. Mark Homer, D-Paris, author of one of the bills, citing polls indicating that Texas voters want that authority.
“We need a commissioner who will strongly represent the people of Texas and who is not under the thumb of the governor,” he said.
Rep. Roland Gutierrez, D-San Antonio, who also is sponsoring legislation, said there is no reason not to elect the person who has so much influence over the lives – and pocketbooks – of Texans.
“I’m not saying it will bring us lower insurance premiums, but it will allow the people to hold the person who regulates insurance companies accountable,” he said.
Gutierrez also pointed to the NAIC study as an indicator that something needs to be done beef up regulation of insurance rates. The study showed the average rate in Texas at the end of 2006 was $1,409 a year – well above the national average of $804.
But the study also showed several states pulling closer to Texas in the comparisons, notably Florida and Louisiana, two hurricane-prone states.