AUSTIN -- Senator Troy Fraser filed emergency legislation today requiring insurance companies to immediately file with state regulators their current rates and projected rates for the next six-month period for homeowners insurance.
The bill also specifically gives the state insurance commissioner the authority to seek information about insurance companies' credit scoring formulas and methodologies, as well as all supporting data used by insurers to determine homeowners insurance premiums.
"We want the insurance companies to open their books and verify that consumers are being treated fairly," Fraser said. "We need to know that the rates being charged for homeowners insurance are just, reasonable, adequate, not excessive and not unfairly discriminatory."
"This is a necessary first step to lay the groundwork and to establish a baseline of information as we address the whole homeowners insurance problem," Fraser said. "To put it another way, we need a clear diagnosis before we start the surgery."
The legislation, Senate Bill 310, requires the insurance commissioner to prepare and deliver a summary of the data to the Legislature within 30 days after passage of the bill.
Fraser, chairman of the Senate Committee on Business and Commerce, said he has requested the bill to be referred to the committee today and that he intends to schedule a hearing on the legislation as early as Thursday.
The legislation applies to insurance companies, reciprocal or interinsurance exchanges, mutual, capital stock companies, county mutuals, associations or Lloyd's plan companies.
"Every insurance company that writes homeowners policies in Texas is subject to this legislation -- including those that have purposefully avoided rate regulation by becoming Lloyd's companies," Fraser said.
The insurance commissioner may require companies to file any manuals, rating schedules, plan of rules, rating rules, classification systems, territory codes and descriptions and other information that insurance companies use to determine policyholder premiums -- including credit scoring formulas and methodologies.
Fraser, R-Horseshoe Bay, made the announcement at a Capitol news conference. He was joined by all eight members of the Business and Commerce Committee and co-authors on the bill; and state Representatives John Smithee, R-Amarillo, and Gene Seaman, R-Corpus Christi, both of whom are expected to play key roles on insurance-related issues.
Fraser's filing of the bill comes less than a week after Governor Rick Perry officially designated insurance and medical malpractice reform as emergency issues for the 78th Texas Legislature. The governor's designation allows state lawmakers to begin work on these issues within the session's first 60 days.
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