Insurers Ask Texas Legislators To Consider Mold, Med Mal. (Briefing).

Hot insurance topics for the next Texas legislative session include homeowners coverage of mold claims and medical liability insurance.

In what is always viewed as a preview to the new legislative agenda, Speaker of the House Pete Laney released a list of "interim charges" or major issues that will be studied by legislative committees in preparation for the next legislative session in 2003.

One industry spokesman hopes the next Legislature will address the state's insurance regulation system. "I hope they look at bringing Texas into the 21st century, in terms of allowing competition in the marketplace pertaining to rate filing. Texas is the only state that doesn't allow companies to compete, because it's so highly regulated" said Jerry Johns, director of the Southwestern Insurance Information Service.

Laney sent four recommendations to the state's House Committee on Insurance. Mold--one of the hottest topics in the state, with 50,000 to 60,000 open mold claims expected by the end of this year--was on the list. Faced with skyrocketing combined ratios and increases in water-related losses, the top three homeowners insurance writers in Texas--State Farm, Farmers and Allstate--placed a moratorium on writing policies that cover water-related claims.

Texas homeowners insurance offers a broader homeowners coverage form that covers accidental water discharge. The Texas Department of Insurance issued proposals recently that call for endorsements and rule changes that would cap basic coverage for mold at $5,000. Policyholders then could buy additional coverage in amounts equal to 25%, 50% and 100% of policy limits.

This interim charge comes at a time when the insurance industry is waiting for Insurance Commissioner Jose Montemayor to issue his solution to the mold mess in the state.