From the Office of State Senator Rodney Ellis
For Immediate Release
February, 6, 2003
Contact: Mike Lavigne, (512) 463-0113
Senators File Major Insurance Reform Package
Austin, TX// The movement toward fixing the homeowners' insurance problems in the State of Texas gained new steam today when a coalition of state senators, led by Senator Leticia Van de Putte (D-San Antonio) and Rodney Ellis (D-Houston) filed SB 400 today. Senate co-authors include Gonzalo Barrientos (D-Austin), Judith Zaffirini (D-Laredo), Eddie Lucio (D-Brownsville), Frank Madla (D-San Antonio), Royce West (D-Dallas), Mario Gallegos (D-Houston), John Whitmire, (D-Houston) Eliot Shapleigh (D-El Paso) and Juan Hinojosa (D-McAllen). SB 400, also known as The Insurance Reform and Consumer Protection Act is a companion to HB 600 by Wolens filed in the Texas House of Representatives last week.
"This Legislation represents real reform,"said Senator Van de Putte. "The time for lip service is over. The people of Texas--our consumers--deserve real relief. This is the only bill so far to address the root causes of Texas' insurance woes."
The Insurance Reform and Consumer Protection Act is the strongest homeowners' insurance reform bill to be filed this session. It is the only legislation that both reigns in the insurance companies and guarantees rate rollbacks.
Major components of the bill include:
1. Prior approval of homeowner insurance prices for the entire industry 2. Making public the secret underwriting guidelines that insurance companies use to dictate prices 3. Banning the use of credit scoring and unfair underwriting 4. Ending the use of "cherry picking" the more profitable lines of insurance
"This legislation allows us to start talking about reform that will actually protect Texans," explained Senator Ellis. "I co-authored this legislation because it helps those who need help the most. This bill fulfills the commitments made by my colleagues from both sides of the aisle during the campaign.."
SB 400 will save Texans buying homeowners insurance $1.9 billion, or an average of $436 per policy each year by rolling rates back to January 2001 levels.
By requiring all insurance companies to get prior approval for rate increases, Texans will be confident that they are getting a fair deal in the future as well.
"This bill is the first in turning the tide on the current insurance crisis," said Sen. Juan "Chuy" Hinojosa. "In the past few years, the industry has taken advantage of loopholes causing families to pay more and more as their homeowner insurance coverage has decreased."
SB400 is identical to HB 600 by Steve Wolens (D-Dallas). The Insurance Reform and Consumer Protection Act is supported by AARP, Consumers Union, Texas Watch, LULAC, MALDEF, Texas PIRG, and Common Cause.