Associated Press Writer
AUSTIN (AP) - The move to reform the homeowners insurance market, which has seen large rate
increases and companies stop writing new policies, kicked into high gear at the Capitol on
Wednesday.
State Sen. Troy Fraser, R-Horseshoe Bay, filed legislation that would require insurance companies to
immediately file with the Texas Department of Insurance their current and projected homeowners rates
for the next six months. It also allows the department to seek all data the companies use to determine
premiums.
Fraser is chairman of the Senate Business and Commerce Committee, which will consider the bill on
Thursday. He said all nine panel members have signed onto the bill, all but assuring its passage to the
full Senate.
"This is a necessary first step to lay the groundwork and to establish a baseline of information as we
address the whole homeowners insurance problem," Fraser said.
He said the state's Republican leadership supports the concept.
Meanwhile, state Rep. Steve Wolens, D-Dallas, filed a bill he said will save Texans buying
homeowners insurance an average of $436 a year.
The bill would roll back rates to 2001 levels, force companies to get approval before they increase their
rates, make insurance information public, prohibit credit scoring and "assure that companies don't just
stick with us in good times," Wolens said.
"We lead the nation with an average homeowners premium that is almost double the national average.
This is simply unacceptable," Wolens said.
Politicians campaigned on promises to fix a market where some consumers have seen premiums rise
as much as 200 percent even as some companies reduced coverage or stopped writing new policies.
Insurance companies blame the increased cost on water and mold claims and other factors. Between
the first quarter of 2000 and August 2002, insurance companies paid $3 billion for mold-related claims,
said Mark Hanna, spokesman of the Insurance Council of Texas.
The state currently can do little to control the premium costs because about 95 percent of policies in
Texas are written by subsidiaries that are exempt from rate regulation.
Fraser said his bill would force companies to open their books and justify that their rates are
reasonable.
Hanna said the industry will be happy to prove its case for the increased rates.
"The industry welcomes the opportunity to provide TDI and lawmakers data showing their residential
property rates and explaining how very significant losses since 2000 have pushed these rates to where
they are today," Hanna said.
Hanna was critical, however, of Wolens' legislation, saying "indiscriminate" rate rollbacks would hurt
the market.
Consumer advocates applauded Wolens' legislation.
"This is an aggressive, consumer oriented bill," said Rob Schneider, a senior attorney with Consumers
Union. "It is the kind of tough approach that Texans need so they know they will be treated fairly by
insurance companies and they will see the rates they pay go down."
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Fraser's bill is SB 310
Wolen's bill is HB 600
