March 6, 2003

Texas Business and Policy Leaders Call on Legislators to
“Trust the Competitive Market"

An Open Letter to Conservatives in the Texas Legislature:

"You know, competition just doesn't work for the insurance market."

Heard that before? Unfortunately we are hearing it a lot, and from some of the most unlikely, and well-meaning sources.

Contrary to what some would have the public believe, Texas has never had a truly competitive insurance market. The regulatory system in Texas is one that attempts to tightly control rates and insurance products through government mandates. That means companies simply don't have the flexibility to price and sell policies that can be tailored to meet their customer's needs.

This session, as conservative legislators, you have the opportunity to stand by the core principle of competition as the absolutely best means of providing consumers with a fair, vibrant market that benefits individuals and businesses alike. For any industry, these principles remain true—including the insurance industry.

With the first Republican-controlled legislature in over 100 years, supporters of competition and free market concepts will be judged by the results of your efforts. Whether our policy makers stay true to their principles and allow real competition will impact not only the insurance market but the overall perception of Texas’ business climate as well. When the smoke clears, the question will be whether conservatives stood behind the principles of a free market, competitive system that provides strong consumer safeguards, or one of government regulation and higher prices??

If you choose to encumber the ability of companies to compete for consumers' insurance dollars by imposing bureaucratic rate approval requirements, rate rollbacks, and limitations on companies' abilities to write policies to respond to specific changes in the market, the answer will be “no.”

Without a competitive market, we will have fewer companies writing policies than we do today, limiting the number of choices for consumers, and inevitably raising prices.

On the other hand, allowing companies to offer competitive policies and rates—while continuing to maintain oversight to protect consumers against unfair market conduct, antitrust, and discriminatory conduct—will create a business climate that should spawn new entries into the market and, subsequently, competitive rates. States with fewer insurance regulations have more products and lower prices than Texas does today - and one should not wonder why or be surprised.

We encourage you to trust the competitive market system. We know it will work.

Jeff Clark State Director National Federation of Independent Business Texas	Representative Anna Mowery Legislative Task Force Director Texas Women's Alliance	Peggy M. Venable Texas Director Citizens for a Sound Economy
Bill Hammond President and CEO Texas Association of Business	Jim Cardle Director Texas Citizen Action Network

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.

You are receiving this email because we feel you may be concerned with insurance-related issues in the state of Texas. If you do not want to receive anything from us in the future, please follow the unsubscribe directions in the footer of this email.