Texas Insurance Commissioner Speaks Out on Insurance Reform Legislation

“We are better served by giving the consumers more choices and allowing them to sort of serve themselves.”

“States make major mistakes in assuming consumers can't make their own decisions.”

— Commissioner Jose Montemayor

Excerpt from AM Best Article
June 24, 2003

NEW YORK (BestWire) - Not that long ago, Texas Insurance Commissioner Jose Montemayor didn't have much to celebrate. The state's homeowners insurance market, ravaged by millions in claims related to mold, was destabilized, and an onerous Texas bill with an amendment banning the use of credit-based insurance scoring was working its way through the Texas House. What a difference a few months make. Thanks to an insurance-reform bill signed by Republican Gov. Rick Perry earlier in June, Texas will be subjecting all of its writers of personal lines to rating standards.

The take-home lesson there from a public-policy viewpoint is we are better served by giving the consumers more choices and allowing them to sort of serve themselves," he said. Montemayor said states make major mistakes in assuming consumers can't make their own decisions. "You can be sure that no matter where you go or what combination you buy, it will be fairly priced, so your shopping is simplified to what coverage you will buy and what you can afford. It's like a shopping exercise," he said. "People do it everyday, whether choosing a phone service or going grocery shopping. You don't just choose between detergent A and detergent B--you have dozens to choose from."

To read more about the components of SB 14, click here

Researchers Study 2.7 Million Auto Records and Find Irrefutable Connection Between Credit History, Risk of Insurance Loss

PR Newswire - June 23, 2003 13:02

NEW YORK - In the largest and most comprehensive study ever undertaken on the connection between credit history and insurance risk, a team of researchers has found that a consumer's credit-based insurance score is unquestionably correlated to that consumer's propensity for auto insurance loss. Even more significantly, the study found that insurance scores are consistently among the most important rating variables used by insurers. Results of the study were presented over the weekend to the National Association of Insurance Commissioners (NAIC) at the group's summer meeting here. Click here to learn more.