National insurance trade association Property Casualty Insurers Association of America (PCI) reported that Texas Insurance Commissioner Jose Montemayor told the House Insurance Committee that the reforms implemented through Senate Bill 14, which passed in 2003, are bringing stability and increased competition to the insurance marketplace.
“We agree with Commissioner Montemayor’s analysis that the market place is regaining its footing after years of instability,” said Donald Hanson, PCI southwestern regional manager and counsel. “The intent of insurance reform was to restore a healthy, competitive homeowners insurance marketplace. Enhancing competition among insurers is and has always been the answer to the issues facing the Texas insurance marketplace. The results of empowering the consumer through a broader range of companies and policies to choose from are beginning to take effect and this offers the best solution to lingering market concerns in this state.”
While the discussion over homeowners insurance has often centered on rates, the root of the issue was the overly broad state-mandated policy form. Last year, regulatory changes were made to provide more flexibility in the type of forms offered. The Legislature also provided the commissioner with the authority to review and approve rates, which has resulted in a series of rate reductions. In addition, the prior approval system for rates will be replaced in December with a file and use regulatory system.
“The move to a file and use regulatory system is also spurring optimism about the future of the Texas marketplace. As the marketplace begins to return to profitability and important regulatory changes are properly implemented, insurers are seeing Texas as a more attractive place to do business. The next step is to ensure that the file and use system adopted will encourage competition. Implementing regulatory policies that promote competition remains the answer to ensuring long-term stability and lower rates for Texas consumers,” Hanson said.
Topics Texas Legislation Homeowners
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