Preliminary Report Shows Insurance Companies Charging Excessive Rates
Austin - An initial report prepared by the Texas Department of Insurance shows that individual insurance company rates could be reduced anywhere from 0 to 25% from their current rates, with some company's rates justified at current levels. The report, presented to the Senate Business and Commerce Committee today, is based on information from the top twelve non-rate regulated companies which make up almost eighty-three percent of the homeowners market.
The Department of Insurance found that the average industry rate increase since January 2000 was 38%, while some consumers saw increases as high as 200%. According to the report required by Senate Bill (SB) 310, one reason for the excessive rates is the standard practice of offsetting discounts by charging other policyholders more. A final report is expected to be published by March 28, 2003.
Lieutenant Governor David Dewhurst said that he is working with the members of the Senate to reach a consensus on driving homeowners insurance rates down by twelve to fifteen percent. The chair of the Business and Commerce Committee, Senator Troy Fraser of Horseshoe Bay, said he is drafting a bill to give the commissioner of insurance the authority to make them bring rates back down to a level that is commensurate with the losses they are currently having.
Following today's session, Dewhurst and Fraser discussed regulating the practice of credit scoring. Instead of banning it altogether, they both said that they prefer to permit it to be used as a tool, as long as it is not the sole determinate used for underwriting and rating purposes. "If we put sunshine on the issue, then not only do we know what they're doing, but we can assure the public that the practices they are doing are non-discriminatory and are fair in the way that they're used," said Fraser, who wants to ensure that people with little or no credit, those who have had medical emergencies, and those with disputed credit do not get discriminated against. He hopes to have a bill out by Monday.
The following bills were passed by the Senate today:
- SB 161, which would grant the Texas Department of Health greater enforcement power over certain licensing programs.
- SB 375, the first bill for Senator Tommy William of The Woodlands, would allow the Ninth Court of Appeals to meet in the county seat of any county in the district as the court deems necessary.
- SB 439 would prohibit the use of devices designed to obscure license plate information.
- SB 519 would change language in the Health and Safety Code in order to facilitate the sharing of health information among agencies.
- SB 520 would remove Upton County from the 83rd Judicial District.
The Senate will reconvene Monday, March 17, 2003, at 1:30 p.m.