Insurance to top legislative agenda

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http://www.gosanangelo.com/archive/02/november/25/2002112501.shtml

Monday, November 25, 2002

Insurance to top legislative agenda

MONICA WOLFSON

Scripps Austin Bureau

AUSTIN - If bills filed in the past two weeks are any indication, insurance

will top the legislative agenda when state lawmakers meet beginning Jan. 14.

The first day of bill filing for the upcoming session was Nov. 12, and

already lawmakers have filed 38 bills related to insurance issues, which is

about 10 percent of the 361 bills filed so far.

Lawmakers generally file about 5,000 bills during a legislative session.

Others bills filed address a variety of issues, ranging from imposing one

minute of silence in public schools to cracking down on drunken drivers.

Regarding insurance, a mix of Republicans and Democrats lawmakers have filed

bills that consumer and insurance industry officials have characterized as

" a good starting place. "

''I like the fact that clearly this issue is still on the radar, " said Dan

Lambe, executive director of Texas Watch, a consumer advocacy group. " We are

pleased to see that it wasn't just a political campaign issue, and I think

the reason why is because of the public outrage. It's clearly a populist

issue and they are driving it. "

Six bills take on credit scoring, two bills tackle tort reform in medical

malpractice lawsuits and five bills address giving insurance companies

flexibility with creating insurance policies. Three other bills propose

three different ways to regulate homeowner and automobile insurance rates.

''We are going to see major reforms,'' said state Rep. Gene Seaman, R-Corpus

Christi, who filed six insurance bills. ''We just don't know what they will

look like. "

Seaman, who is a member of the House Committee on Insurance, said the

feedback on his bills has been mixed.

''The file and use (policy form) bills are well accepted, " Seaman said.

" Everyone wants that because it increases competition in the market place.

But (State Farm, Allstate and Farmer's Insurance) are not happy with my

(partial rate regulation) bill because it's going to regulate their business

and that's what it was directed at. The bill could bring them under

regulation, and that's a great concern for them. "

Seaman's bill requires homeowner insurance companies with more than 10

percent of market share to file and get approval of their rates with the

Texas Department of Insurance.

Many of the insurance bills are repetitive, but there are several unique

bills.

Along with the partial rate regulation bill, Seaman believes consumers

deserve up to a 10 percent discount on premiums if they have made no

homeowner insurance claims in the past several years.

State Rep. Lon Burnam, D-Fort Worth, wants to set up an insurance plan run

by insurance companies that offers homeowners insurance to consumers who

have been rejected at least twice for policies.

And state Sen. Troy Fraser, R-Horseshoe Bay, wants to make insurance

companies promptly handle water claims and bars the insurance industry from

rejecting a renewal or a new policy based on whether a previous water damage

claim has been filed.

''The overriding goal of the package is to lower homeowner insurance rates

for consumers and restore competition in the market that is currently

dominated by three companies, " said Fraser, chairman of the Senate Business

and Commerce Committee, which studied the insurance crisis over the past

year. " We need to rid the system of those profiteering from mold hysteria

and artificially driving up rates. "

While state Sen. Mike 's bill makes both automobile and homeowner

insurance companies file premium rates and get approval from the department

of insurance, many of the bills concerning rate regulation fail to include

the increasingly deregulated automobile insurance market.

While 95 percent of homeowner policies are written in the Lloyd's or

deregulated insurance market, 30 percent of the automobile market is handled

by County Mutual companies, which are not regulated.

''Texas is about the most deregulated state for homeowner's insurance, " said

Birny Birnbaum, a consumer advocate with the Center for Economic Justice, a

nonprofit advocacy group the works on insurance and credit issues. " We are

starting from that point, and we still have an insurance crisis. Now this

new lobbying effort is saying they need even more deregulation. "

Only two bills so far address tort reform in medical malpractice lawsuits.

Along with capping non-economic jury awards at $250,000 in medical

malpractice lawsuits, state Rep. Arlene Wohlgemuth, R-Burleson, wants the

amount of jury awards reduced if a plaintiff receives a settlement offer

that equals or is less than the jury award.

The plaintiff would also be responsible for a portion of the court costs and

the defendant's attorney fees despite winning the lawsuit. More bills will

be filed, lawmakers and consumer groups said.

Fraser is working on insurance-related tort reform legislation and an

unidentified legislator will be introducing a package of insurance

legislation favored by Gov. Rick , said Kathy Walt, a spokeswoman for

the governor.

And Seaman is drafting more legislation concerning the licensing and

training of insurance adjusters and mold remediators. Three bills calling

for adjusters and remediators to be licensed, bonded and trained already

have been filed.

Contact Wolfson at (512) 334-6642 or by e-mail at

wolfsonm@....