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Bills Filed in Texas Aimed at Increasing Insurance Policy Transparency

Two pieces of legislation recently filed in Texas would require insurance companies to provide customers with more complete information on rate increases and expand resources available to consumers for shopping the market.

Rep. Armando Walle of Houston says House Bill 2723 and House Bill 2724 would “help consumers fully understand the premium increases imposed by insurance companies and will give consumers information on how they can shop around.”

HB 2723 concerns accident and health insurance policies. Under the measure, an insurer must notify consumers of the rate increase 60 days prior to it taking effect, according to information posted on the Texas House of Representatives’ Web site. The notice would have to include the amount of the increase and information about how to file a complaint. Additionally, the bill would require the notice to include Web site addresses where consumers can access information regarding rate increase justifications and alternative coverage options.

HB 2724 contains similar provisions for Texas homeowners insurance, property insurance and Houston auto insurance. At the time of a policy renewal, the Texas insurance company would be required to provide a side-by-side comparison of the new and old rates, as well as provide information on any changes in coverage and how to shop around. The bill also requires insurers to give the deductible in a dollar amount, rather than in a percent of the total value of the policy.

Rep. Armando Walle is serving his second term in the Texas House of Representatives and serves on the House Committee on Insurance and the House Committee on Homeland Security and Public Safety. He represents House District 140, which includes northern portions of unincorporated Harris County and the City of Houston.

Texas Insurance Windstorm bill - A Poison pill for gambling?

GALVESTON—Owners of wind turbines, gambling casinos and sexually oriented businesses such as adult video stores would be barred from buying Texas Insurance windstorm policies through the most common source under a bill filed Thursday in the Texas House of Representatives.

House Bill 272 would forbid the Texas Windstorm Insurance Association from issuing coverage on those three types of property even if they otherwise qualified for the policies. The association issues most of the windstorm coverage for property along the state’s hurricane-exposed coast.

Whether such a law would be a poison pill for casino development in Galveston was unclear Thursday.

State Rep. John Smithee, a Republican from Amarillo and chairman of House Insurance Committee, included the amendment in a bill proposing a major overhaul of the law governing the association’s operations and financing.

It was not appropriate for insurance ultimately backed by Texas taxpayers to be written on casinos and sexually oriented businesses, Smithee said.

Travelers Insurance received a cease and desist letter from the Office of Attorney General demanding a deceptive television advertisement be pulled off the air in Texas.

Texas Attorney General Greg Abbott sent the demand letter on July 8, 2010 instructing The Travelers Companies Inc. to cease the ads, and that they be “removed from all Texas television media markets as well as any print, multimedia, radio or computer-generated ads that appear in the state.”...

Discretionary clauses allow insurers to interpret policy terms and evaluate an insured’s claim for benefits. According to the TDI’s official proposal, the ban “is necessary to protect insurance consumers from the possibility of incorrect and unfair coverage determinations by insurers without a subsequent opportunity for a full and independent review under a non-deferential standard.” The TDI is concerned that insurers may have a conflict of interest in coverage determinations that would have an adverse financial impact on the insurer, and therefore want to ensure that insureds have the opportunity to have coverage determinations reviewed by an independent third party...