Association of Fire and Casualty Companies of Texas: Many Insurers Not Leaving Texas - No Special Session Needed.

Business Editors

AUSTIN, Texas--(BUSINESS WIRE)--Oct. 2, 2002

The Association of Fire and Casualty Companies of Texas (AFACT) is an insurance trade association that has been comprised of property and casualty insurance members who are committed to a healthy and viable insurance market in Texas.

AFACT has been involved on behalf of its members in legislative and regulatory matters for over fifty years. Many of its members include companies who have been doing business in Texas for fifty years or longer. AFACT's members that are currently writing homeowners insurance are concerned about the current political, regulatory and legislative environment affecting insurance consumers and companies as well.

AFACT's member companies writing insurance understands that Texas is facing a homeowners insurance crisis and stands committed to work to find innovative ways to continue to provide quality, affordable homeowner insurance products to Texas families. AFACT's member companies are still offering homeowners policies to Texas consumers and agree that homeowners deserve insurance policies that best suit their needs.

The work that has been done by the Governor's office and the Texas Department of Insurance to date to expand the range of homeowners insurance products available to Texas families will allow insurers and consumers the freedom to purchase coverage that consumers believe best meet their needs.

The members of AFACT have been working diligently with elected officials, candidates, the Department of Insurance, and House and Senate Committees to provide information and to help them carefully and deliberately craft new laws that might be needed in the future. AFACT's members are all participating in the market assistance program which is a program designed to help consumers to be able to locate insurance through other insurers including members of AFACT.

Some of AFACT's members have done business in Texas for over fifty years and employ hundreds of individuals in the state of Texas. AFACT's members continue to provide service in the Texas market place. Many of AFACT's members have provided service in under-served market places in Texas for long periods of time. AFACT's members include Lloyds and reciprocal companies that are not rate regulated, but are regulated in many respects by the Texas Department of Insurance. It is important to remember that the average cost of homeowners policies in Texas actually decreased in 1999 and 2000. It was the emergence of the large water losses (or mold claims) that has interrupted that trend and contributed significantly to the current homeowners crisis. Historically, most Lloyds and reciprocals have offered coverage at rates below the average benchmark.

At this time, AFACT does not believe there's a need for a special session of the legislature. AFACT's members are currently working to expand the range of homeowners insurance products to Texas families through recently approved national forms that the Department of Insurance has approved.

In summary, AFACT's member companies and many other insurers are committed to finding solutions to finding marketplace stability and lower homeowners insurance costs. AFACT's members are committed to providing solutions to assure the availability of various homeowners insurance products to consumers that allow consumers to choose those products that best fits their needs.