| February
26, 2003
Dr.
Phil O’Connor, Former Illinois Director of Insurance,
Speaks Out on Insurance Reform in Texas
The large national companies have said 'we are not going
to risk the capital of our entire company nationally in order
to do business in Texas...anybody who's proposing a solution
has to answer the question, 'How does my plan reverse that
trend line?
| Insurance
reform legislative update
Senate Bill 310, which requires companies to all file
their information with TDI has been signed by Governor
Rick Perry. We are confident that once all insurance
company data is put on the table and reviewed by the
Commissioner, it will be clear that insurers have suffered
staggering losses in Texas for a number of years.
Legislators can then focus insurance reform
efforts in the right direction --- encouraging competition
among insurance providers and reducing the costs that
have driven rates up such as state mandated-policy forms,
fraud, and frivolous lawsuits. Click
here to read TCAIS' full proposal for insurance reform
in Texas. |
Insurance
reform legislation should encourage companies to do business
in Texas
In a recent
Quorum Report interview (2/24/03), Dr. Phil O’Connor,
former Illinois Director of Insurance, stated that the "current
business climate" for insurers is one of the main areas
he suggests lawmakers focus on this session...The large national
companies have said 'we are not going to risk the capital
of our entire company nationally in order to do business in
Texas...They are going to limit their exposure because they
are so unsure of the conditions in Texas that they can't expose
their shareholders or mutual policy holders to that kind of
risk."
O'Conner
pointed to research he compiled showing that the availability
problem in Texas has been growing for some time with a steady
exit of U.S. insurance companies leaving the Texas market
over the past decade.
O'Conner
was very clear that onerous regulations,
such as rate rollbacks or prior approval mandates, will not
increase the supply of companies in Texas.
| Click
here to learn how the competitive
rating insurance system in Illinois has hundreds of insurance
providers competing for the affections of homeowners who
currently enjoy rates less than half what the average
Texan pays. |
His research
indicates that states with prior approval mandates:
- Have
higher exit and lower entry rates
- Tend
to have higher rates than competition-based states
- Include
13-14 of the most costly insurance states
- Burden
Insurance Department resources with paperwork and create
a slow and inefficient structure
Permission
for publishing excepts from this interview was granted by
the Quorum
Report.
Texas
Coalition for Affordable Insurance Solutions
www.TCAIS.org
TCAIS
is a proactive alliance of insurance providers and trade organizations
committed to working with legislators, regulators, consumers
and others to find public policy solutions that will improve
insurance availability and affordability in Texas. |
