Senator Carona's Email Update
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November 21, 2003

What's new . . .

Robin Hood - My mail indicates that the number one priority of Senate District 16 residents is reform of the school finance system.  This is my first priority as well.  In fact, I advocated addressing the school funding issue during the 2003 Regular Session.  The decision was made by our legislative leaders, however, to address this issue in a special session after study committees have had a chance to develop a new plan.  Although Governor Perry has not specified a date (the Governor possesses sole authority to call the Texas Legislature into special session), he has indicated his intention to call a special session on school finance sometime next spring.  Revamping our school finance system to provide property tax relief and abolish the Robin Hood share-the-wealth plan while maintaining equity in the system will not be a simple task, and it certainly merits our forethought and focus.  As such, the Select Joint Committee on Public School Finance, co-chaired by Senator Florence Shapiro and Representative Kent Gruesendorf and composed of members of the Senate and House, has already had four meetings.  Additionally, House Speaker Tom Craddick named a House Select Committee on School Finance to review the matter.  This group has met in various subcommittees, concluded their meetings, and is now in the process of preparing reports.  This preparatory work will now continue through the Select Joint Committee.  The next meeting of the Joint Committee is tentatively scheduled for  December 4-5, 2003, to hear testimony on tax and revenue options.  The goal of these efforts is to have the framework of a new school finance plan as a starting point when the Governor calls the Legislature into special session.

It may appear that there is no activity surrounding the issue of school finance because it is not in the forefront of traditional news media, however this is not the case.  You may follow the work of these special committees by checking the following links:

House Select Committee on School Finance -
Select Joint Committee on Public School Finance -

From these sites you can find witness lists and minutes from previous meetings and follow  scheduled meetings when posted.  Yes, we are working on school finance so that we will be ready when the Governor calls us!

Focus . . .

Credit Scoring - During the 2003 Regular Session of the Texas Legislature, insurance reform was passed in Senate Bill 14 (SB14).   Inclusion of credit scoring was controversial, but it was ultimately decided that setting parameters for the practice, rather than prohibiting it completely, would prevent future abuses of credit information by the industry under another name.  Under the credit scoring portion of SB 14, which takes effect in January 2004, an insurer must disclose to a customer if credit information will be obtained or used.  The insurer must also disclose the name of each person on whom credit history was obtained or used and how each person's credit information was used to underwrite or rate a policy.   Additionally, SB14 prohibits an insurer from denying, cancelling, or non-renewing a policy of personal insurance solely on the basis of credit information.

In September, Texas insurers who use credit scoring were required to file their underwriting models with the Texas Department of Insurance (TDI).  TDI is currently reviewing each company's model to determine if they are based on sound actuarial practices and what parameters are needed.  Insurers must prove that every percentage of rate differential used is based on actual losses.  If the models do not accurately reflect its risk, an insurer will not be allowed to use credit scoring at all.  On November 10, 2003, the TDI Commissioner adopted preliminary rules regarding the use of credit scoring by insurers.  Under the new rules, insurers must justify the rates charged as a result of credit scoring.  In December, following completion of its study of credit scoring, TDI will make a  final determination on the accuracy of and need for credit scoring as a pricing practice,  In addition, TDI is expected to propose amended rules addressing further limits and the possible capping of premium increases due to credit scoring.  Capping rate increases that are based on a consumer's credit score could, however, result in passing on increases to consumers with good credit scores.  The primary goal of TDI will be to make sure that the rate differences match the individual risk. 

While the Texas Department of Insurance will be monitoring insurers and determining whether their rates are justified, information provided by you--the consumer--is critical in regulating and enforcing these new laws.  For more information about the development of rules and to make public comments or complaints, visit the TDI website at  I will cover other aspects of the insurance reform legislation in future updates.

Did you know . . .

Did you know that there is a lot of work done in the "interim," the time period between regular sessions of the Legislature?  Interim charges are issued by the Lt. Governor and the Speaker of the House after the conclusion of a regular session to direct the committees on particular issues to study in preparation for the next session of the Legislature.  On November 4, 2003, House Speaker Tom Craddick issued interim charges to the House and named several select committees.  You can view Speaker Craddick's interim charges at by clicking on "Interim Study Charges."  As of this update, Lt. Governor David Dewhurst has not issued our interim charges for the Senate.  You can watch for his charges at by clicking on "Committees."  I do expect that Governor Dewhurst will issue his charges in early December and I will include that information in a future update.

I hope that you have a safe and happy Thanksgiving holiday, this most American of all holidays.  May we all remember to express thanks for our freedom as we enjoy the fellowship of family and friends in this great state of ours.

John Carona
State Senator - District 16