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File and Use
Texas consumers would benefit from a fully implemented file and use system because
insurance companies could offer more choices for polices and rates,
and this will allow consumers to choose the insurance plan
that best fits their needs and budgets.
With a true file and use system, insurance companies would have the
ability to set their own rates, and this will lead to lower rates
for consumers because companies will compete to attract new customers.
Under a true file and use system, the Texas Department of Insurance
will still protect customers from fraud and abuse, and ensure that
insurance companies have enough money to pay claims.
Because of a law passed in 2003, insurance companies have more flexibility in setting their rates for home and
auto insurance in Texas. Unfortunately continued government regulation of Texas insurance
through discretionary authority exercised by the insurance commissioner has resulted in continued, unnecessary market uncertainty. The fully implemented file and use system
will result in a more competitive marketplace
and more insurance companies from which
consumers can choose.
Just look at what’s happening in New Jersey, which
transitioned from an over-regulated insurance marketplace to a
highly competitive, thriving market where consumers are benefiting
tremendously and saving millions.
Government regulation of the Texas insurance
market has resulted in reduced options and in consumers paying
comparatively higher rates for home and auto
insurance. The properly implemented file and use system will result
in a more competitive marketplace with more choice, better service, and the best rates for Texas consumers.
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