Insurance reform looming

Two Republican state Senators have prefiled legislation to deal with the insurance crisis in Texas.

Sen. Troy Fraser, R-Horseshoe Bay, and Sen. Mike Jackson, R-La Porte, prefiled a package of bills that would bring all insurers under rate regulation. Currently, 95 percent of homeowners insurance is written by unregulated county mutuals.

Fraser said the legislation is designed to address the insurance crisis that figured prominently in this fall's election.

"The overriding goal of the package will be to lower homeowners rates for consumers and restore the competition to the market," said Fraser.

The centerpiece of the package of eight bills would require all insurers to justify the rates they charge for home and auto coverage. Other measures would bar companies from cherry-picking profitable lines of insurance while abandoning other lines and would prevent companies from denying coverage because of a previous water-damage claim.

All worthy goals, though there are other things, such as a ban on credit scoring and greater accountability (as cited by a spokesman for Texas Watch later in the article) that I'd like to see as well. But it's a good start.

So how do these guys feel about being reformers?

Fraser acknowledged that the insurance industry hasn't lost many battles in the past.

"They are worthy opponents. But the fact that you have two pretty conservative Republicans that are starting this process should be a signal that we're worthy opponents also," said Fraser.

Gee, why do you think the insurance industry has such a winning record? Maybe because those conservative Republicans have always rolled over for them. I'll bet one way or another there will be some hurt feelings in Austin this year.

Part of the reason why progressives eye reforms advocated by conservatives with suspicion is because we think the conservatives want to target things that aren't part of the problem as we see it. To wit:

"The mold issue to a very large degree is a manufactured crisis driven by unlicensed and unregulated public adjusters and mold remediators coupled with a healthy dose of lawsuit abuse by plaintiffs' attorneys," said Fraser, who plans to file tort-reform legislation in the coming months.

"Tort reform" is to my ears much like "health care reform" is to conservatives' ears: a warning that ideological motives are at play and are threatening to wreak havoc on something that we think works just fine as is. I don't dispute that there are abuses in the tort system, just as there are abuses by insurance adjusters. I say the amount of attention that is paid to "lawsuit abuse" is way out of proportion to the number and scope of abuses, and that the proposed remedies do little more than cripple what is sometimes the only weapon that ordinary consumers have against corporate power. The fact that plaintiff's attorneys are mostly Democrats and among the biggest donors to the Democratic Party is just icing on the cake.

I'll keep an open mind on this. If the reforms that get passed address most of the problem without making anything worse, I'll give credit where it's due. We shall see.

Posted by Charles Kuffner on November 21, 2002 to The great state of Texas | TrackBack