TEXAS INSURERS JOIN TO BACK THEIR VERSION OF REFORM.
Members include Allstate, State Farm, Nationwide and USAA, as well as the American Insurance Association.
They kicked off their campaign Nov. 10 with ads in major newspapers in the state built around the theme, "Don't just get mad, get it right."
The ads say in states such as Illinois, insurance companies are plentiful, rates are below the national average and the regulatory structure allows companies to compete on products, price and service. They say unlike Illinois, the current system in Texas doesn't encourage competition while providing strong consumer safeguards.
The coalition lists seven core principles:
* State regulatory authority over all insurance companies in the state, including Lloyds and reciprocals, which would have to file rates or rate changes with the Texas Department of Insurance. After filing, TDI would review them and publish a rate guide for comparison.
* State regulatory authority over policy forms, requiring all insurers doing business in the state to file them for approval in advance.
* State authority over solvency, based on statutory investment and risk-based capital requirements and financial examinations every three years unless financial strength justifies a deferment to five years. Unfunded covered claims liability would be paid by Texas insurance companies through guaranty fund assessments.
* State authority over market conduct, including the power to investigate anyone engaged in the business of insurance in Texas to determine whether the firm or individual person has been or is engaged in unfair competition or unfair or deceptive acts. TDI would have the authority to launch an examination based on the volume or type of complaints.
* State authority over accessibility, including the existing Market Assistance Program, Texas Windstorm Insurance Association and Fair Access to Insurance Rates Plan, with some modification of responsibilities.
* State authority over consumer protection, with continued funding of the Office of Public Insurance Counsel by annual assessments on insurance companies.
* State legislative oversight under a new Joint Legislative Oversight Committee reporting each legislative session on the scope of competition analogous to reports on telecommunications and electricity competititon.