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May 31, 2009
UPDATED: House signs off on windstorm insurance compromise, Senate action expected later
House members today approved the conference committee report shoring up a fund supporting hail and windstorm insurance coverage for coastal property-owners.
Assuming the Senate similarly OK’s the legislation, it’ll go to Gov. Rick Perry, whose threat to call a summer special session if lawmakers didn’t address the windstorm topic helped kick-start negotiations about 10 days ago.
Sen. Troy Fraser, R-Horseshoe Bay, said a moment ago he expects Senate approval tonight. (UPDATE: The vote did not happen Sunday.) Referring to previous efforts to amend the windstorm law, Fraser said: “This represents six years of work, so we’re excited.”
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May 30, 2009
Hegar: Deal on TWIA
Fresh from closed-door negotiations on several bills just before a midnight deadline, state Sen. Glenn Hegar, R-Katy, just confirmed as he walked through the Senate Chamber: “It looks like we have a deal on (TWIA). I’m confident.”
Critical funding for the Texas Windstorm Insurance Association has been cliff-hanger since Friday, when a House procedural deadline axed a number of bills — including a windstorm insurance measure that had been tacked onto a House bill by the Senate to try and save it.
Gov. Rick Perry has threatened to call lawmakers back into special session immediately after their regular every-two-year session ends Monday if they don’t fix the windstorm insurance problem.
The program covers windstorm insurance in Texas coastal areas, and hurricane season soon begins.
While Hegar provided no details, he said he had been briefed on the proposed deal and expects an announcement tomorrow.
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Fraser says rates will be fair to coastal residents in expected windstorm deal
Legislators who’ve been huddling on a windstorm insurance plan seem close to a deal that would moot Gov. Rick Perry’s threat of last week to call a summer special session on the topic.
And Sen. Troy Fraser, R-Horseshoe Bay, said a moment ago that the plan being discussed will be fair on the windstorm insurance rates paid by coastal property-owners—a statement that coastal House members standing next to Fraser didn’t quibble with.
“We’re moving in the direction” of a deal, Fraser said.
Asked if there are any substantive stumbling blocks, Fraser replied: “We don’t have anything identified right now, but obviously the devil is in the details of getting it on paper.”
Asked when members of a House-Senate conference committee will meet in public on their differences, Fraser said: ” The unfortunate thing is we probably don’t have time to do that… I don’t believe there’s time for adequate (public) notice on this issue.”
Calling the result “very pro-consumer,” Fraser said: “The people of the coast are being treated very fairly.”
Rep. Todd Hunter, R-Corpus Christi, said members are close to an agreement in principle. “People do want to solve it,” Hunter said.
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UPDATED: Windstorm's House negotiators huddling, awaiting senators
House negotiators assigned to work on a deal with the Senate on a windstorm insurance plan have been jawing for the past hour in a Capitol conference room.
As of 1 p.m., though, the room was devoid of senators, perhaps because the Senate hasn’t yet appointed its conference committee negotiators. (UPDATE: Sen. Troy Fraser, R-Horseshoe Bay, walked in just before 1:30 p.m. And Lt. Gov. David Dewhurst named the Senate’s conference committee members: Sens. Mike Jackson, Fraser, Leticia Van de Putte, Glenn Hegar and Tommy Williams.)
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May 29, 2009
Safety net still an option for TDI
A preemptive effort to keep the Texas Department of Insurance out of the sunset safety net bill failed late Friday night.
In a 54 to 89 vote, House members rejected a move by Rep. David Leibowitz, D-San Antonio, to instruct the chamber’s conferees for House Bill 1959 not to protect the agency by including it in the compromise agreement.
The sunset review bill for the Insurance Department got stuck behind the logjam this week so it would be wound down unless included in the safety net bill. Gov. Rick Perry could also call a special session to address the issue.
“It is absolutely unthinkable to let this agency go,” Insurance Committee Chairman John Smithee, R-Amarillo, said. “Don’t let this get caught in the political crossfire.”
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House requests conference committee on windstorm fund rescue plan
House members heeded Rep. Larry Taylor’s motion that they turn over legislation shoring up a windstorm insurance fund to a House-Senate conference committee. Taylor told House members before the action that the step was necessary to reach an agreement fending off a summer special session.
Speaker Joe Straus named Taylor to chair the House’s delegation to the committee, whose senatorial members are to be named later. The 10-person group will have to reach a deal in time to have the resulting plan printed and distributed to the House and Senate by midnight Saturday.
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May 26, 2009
Windstorm inaction could leave private insurers paying bulk of claims for two years
Gov. Rick Perry let it be known last week he intends to call a summer special session if lawmakers fail to send him a plan shoring up the fund providing windstorm and hail insurance coverage for residents of 14 coastal counties and a slice of Harris County.
Still, windstorm legislation looks likely to die short of House floor action because the proposal sits behind the spotlit voter identification measure that Democratic leaders don’t want to take up; they’ve been slow-going dozens of otherwise non-controversial local and consent measures since Thursday evening to ensure the House doesn’t reach the ID measure before today’s midnight deadline for House action on Senate proposals.
Sen. Troy Fraser, R-Horseshoe Bay, said today he’d been assured by Perry aides Monday that Perry is still thinking about starting the session next Tuesday June 2, the day after the 140-day regular session comes to a close.
Perry has an alternative, however, which would be to leave the windstorm law as it is.
Jim Oliver, general manager of the non-profit Texas Windstorm Insurance Association, said Tuesday: “As far as us getting money to pay claims, there won’t be any problem at all.”
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May 20, 2009
UPDATED: Perry warns of immediate special session if windstorm plan doesn't pass
Gov. Rick Perry told legislators this afternoon he could call a special session immediately after the regular session ends June 1 to work on a plan patching up the fund that provides windstorm insurance coverage to property-owners in 14 coastal counties and a sliver of Harris County.
UPDATE, 6:49 p.m.: Perry spoke hours before a House panel advanced a negotiated version of the Senate-approved Senate Bill 14 by a 7-2 vote with Democratic Reps. Senfronia Thompson of Houston and Trey Martinez Fischer of San Antonio voting no. The two each asked for more time to review the revised take, which had been hammered out by Rep. John Smithee, R-Amarillo, who chairs the House Committee on Insurance, and three coastal state representatives.
Smithee said action was needed tonight to ensure floor consideration before Tuesday’s deadline for House action on Senate measures.
To be seen: How insurance rates could change depending on distinct House and Senate approaches to windstorm coverage and how insurance companies would be affected under the competing versions.
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April 30, 2009
UPDATED: Revised windstorm insurance plan spares huge up-front charges, but envisions big bumps if hurricanes whip in
UPDATED: Coastal residents would likely face windstorm insurance rate increases of 5 percent a year for the next three years under an insurance rescue plan approved by the Texas Senate this afternoon.
But if a hefty hurricane hits Texas, property-owners from border to border could be required to help pay off bonds issued after the storm. Estimated charges after an event like last year’s Hurricane Ike would run from $85 a year for 10 years along the coast to $2 a year for 10 years in inland regions including Travis County.
The estimated 5-percent-a-year increases for property-owners along the coast would be needed to fulfill the revised plan’s demand that the state’s windstorm system become actuarially sound in the three years, sponsoring Sen. Troy Fraser said.
The proposal, addressing an issue deemed an emergency by Gov. Rick Perry, was embraced by some previously resistant senators from coastal districts because it eliminates previously envisioned insurance surcharges of 30 percent or more for coastal property-owners. It cleared the Senate by 27-4 and awaits House review.
“It’s fair to all concerned,” Sen. Tommy Williams, R-The Woodlands, told Fraser, R-Horseshoe Bay. “You’ve got a real fair plan.”
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Essence of possible Senate deal on windstorm: No immediate surcharges
Sen. Troy Fraser, R-Horseshoe Bay, was mum Wednesday afternoon on the contours of what he called a “fragile” deal on shoring up the state’s approach to windstorm insurance. This morning, I heard elsewhere from an authoritative source that the essence of the deal he was referring to is that property-owners in 14 coastal counties and a sliver of Harris County wouldn’t be facing immediate insurance surcharges of 20 percent or more if the compromise becomes law.
Huge caveat: This deal isn’t a deal until a version of Senate Bill 14 clears the Senate floor and heads to the House.
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April 24, 2009
Stalled windstorm insurance plan topic of Dewhurst-led talks
Senators started huddling with Lt. Gov. David Dewhurst this afternoon toward finding common ground on a plan boosting the state’s depleted windstorm insurance fund.
Without action shoring up the fund, Dewhurst said: “It’s like we’re riding a horse without any clothes on.” Noting that participation in the fund has nearly quadrupled in four years, Dewhurst said: “That is scary.”
Dewhurst predicted that senators would mull issues over the weekend and resume talks next week.
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April 17, 2009
Hegar: Monday for Insurance Commission sunset bill
State Sen. Glenn Hegar, R-Katy, just told reporters that the Texas Department of Insurance sunset bill will not be debated today as expected.
“Monday,” he said.
Debate on Senate Bill 1007 has been delayed for several days amid behind-the-scenes wrangling over issues regarding homeowners’ coverage.
“Third time’s the charm,” said Hegar, the bill’s author. “We’re going on Monday.”
No word on how many votes Hegar has — or may still need — but senators generally don’t schedule a bill for debate unless they have enough votes to pass it.
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March 31, 2009
Fraser foresees coastal homeowners paying 20 percent insurance surcharges or more
Sen. Troy Fraser this morning gave Senate colleagues their first look at his revised legislation to shore up the state’s catastrophe fund against windstorm disasters. Look for the revamp here after today’s Senate Business & Commerce Committee hearing wraps up.
“There’s a lot of pain to be passed around here and there’s going to be a lot of people fighting this,” Fraser said after his roll-out drew contentious questions from coastal senators. “The reason it’s hard to pass; the insurance people fight it because they don’t want to pay more, the coastal people fight it because they don’t want their (insurance) rates to go up even though they’re too cheap right now and then the rest of the state are being caught with the burden because we can’t pass a bill.”
There’s a big-dollar gap in Fraser’s latest plan. Like Rep. John Smithee, R-Amarillo, who’s carrying the House’s lead proposal on windstorm insurance, Fraser doesn’t know yet how the state will cover its share of restoring the state fund depleted after Hurricane Ike last year. (See Smithee’s Monday take here.)
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March 30, 2009
Smithee: Rainy day fund won't be source to restore windstorm insurance fund
Rep. John Smithee has backed off his recent proposal to let a state insurance fund borrow up to $1.5 billion from the state’s rainy day fund in the event of a hurricane-like disaster.
Smithee, R-Amarillo, chairman of the House Committee on Insurance, said today he shifted from his initial proposal—blogged about here—in recognition that Lt. Gov. David Dewhurst isn’t supportive of schemes to tap the rainy day fund for such a purpose.
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March 16, 2009
Worker's comp issue unresolved
House members Monday rehashed the complicated worker’s compensation issue at the heart of a conflict between legislators and the Texas Supreme Court.
Trying to make the issue understandable, state Rep. Helen Giddings, author of House Bill 1657, put the contractual trade-off at play in this issue in the following terms:
“It’s almost like having a wife and a girlfriend,” she said, lightening up the very dense testimony for just a moment.
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March 13, 2009
Proposed windstorm changes could affect rainy day fund, coastal residents
Coastal homeowners would pay more for windstorm insurance and be required to purchase federal flood coverage under a sweeping plan filed this week by the chairman of the House Committee on Insurance.
In the event of a hurricane driving down the balance in the state’s last-resort insurance fund overseen by the Texas Windstorm Insurance Association, Rep. John Smithee’s proposal envisions the state lending up to $1.5 billion from its “rainy day” fund to cover claims.
The fund, which serves Texans in 14 coastal counties and a portion of Harris County near Galveston Bay, was depleted last year by claims associated with Hurricane Ike.
“We have to do something,” Smithee said. “We’re going to have significant problems with a major storm this time,” both in initially covering claims and ultimately replenishing the TWIA fund.
Smithee said the plan was deliberately filed as House Bill 911 to signify that windstorm coverage is an emergency.
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February 24, 2009
Poll: Texans not aware the state has highest home insurance rates
Most Texas voters think home insurance rates in Texas place the state about the middle of the 50 states, though Texas rates remain the highest in the nation.
That’s one finding of a poll commissioned by Texas Watch of 603 likely voters taken from Feb. 4-7, with a margin of error of plus or minus 4 percent. The consumer group hopes the poll gives liftoff to proposals long sought by advocates seeking to drive down rates and improve coverage partly via government action—including direct election of the Texas insurance commissioner, who’s a gubernatorial appointee.
It initially looked to me like some of the poll results might reflect the framing of questions.
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February 3, 2009
Time to look at insuring state properties
State-owned properties, including the Governor’s Mansion, got walloped last year by disaster.
Now that legislators are reviewing the hefty bill for that destruction, Sen. Steve Ogden, R-Bryan, said it is time to review the state’s policy on insuring state-owned property.
Agencies can largely choose whether they want to insure their buildings and equipment against storm and fire damage. But few do.
The Governor’s Mansion, for instance, was not insured when an arsonist started a fire at the historic building in June. Now the state must pick up the cost of $27 million of repairs and security upgrades.
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August 18, 2008
Homeowners insurance reforms must go further, TPPF says
A 2003 overhaul of the Texas homeowners insurance market has failed to foster adequate competition in the market and consumers are bearing the costs, the Texas Public Policy Foundation said in a Homeowners’ Insurance Report.pdfreport released Monday.
As the Sunset Advisory Commission wraps up its review of the Texas Department of Insurance, the foundation’s report called for state leaders to embrace fully the “file-and-use” regulatory system put in place in 2003.
The “file-and-use” rate system for auto and home insurance allows companies to increase premiums once they notify the Texas Department of Insurance, which can challenge any increase it deems excessive. Prior approval is only required in certain cases.
The state has kept a “finger on the regulatory side of the scale” which has discouraged new companies from jumping into the mix so consumers are not reaping the benefit of additional competition, according to the report.
“It didn’t get there. We need to finish that job,” said Bill Peacock, director of the foundation’s Center for Economic Freedom.
Alex Winslow, executive director of the consumer advocate group Texas Watch, said loosening the regulation on insurance companies will make their lives easier while homeowners’ lives get harder.
The report also recommended eliminating the Office of Public Insurance Counsel, a state-funded consumer advocate. The sunset commission staff had suggested folding that office into the Insurance Department, but the report’s authors went a step further.
“We’re focused on making the entire regulatory process consumer-friendly so that we don’t need a consumer representative,” Peacock said.
Winslow said eliminating the public insurance counsel would tilt the market heavily in favor of the insurance companies.
“This is just misguided and a misunderstanding of the market in Texas,” Winslow said.
The Sunset Advisory Commission will take up the issue on Sept. 23 and Sept. 24. The commission will make a recommendation to the Legislature, where Winslow expects a “smart and healthy debate.”
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June 25, 2008
Public insurance counsel gets support at hearing
The proposed dismantling of a state agency that represents insurance consumers encountered resistance on Tuesday evening at a meeting of the Sunset Advisory Commission.
A staff report issued by the commission, which reviews departments every 12 years to make recommendations to the Legislature on whether they should be continued, recommended folding the Office of Public Insurance Counsel (OPIC) into the state Department of Insurance, citing the two bodies’ overlapping functions. But at yesterday’s meeting, State Rep. Ruth Jones McClendon, D-San Antonio, strongly contradicted the staff report, saying that dissolving OPIC would eliminate a vital safeguard for consumers in the insurance market.
“The suits were here today in the back of the room,” McClendon said, referring to the insurance representatives present at the hearing. “They have big lobbies and they can influence in a great manner the Texas Department of Insurance — it’s important we have another component to this; it’s important to have a consumer component.”
Other members of the commission did not reveal their positions on OPIC, but questioned why a Senate bill passed in 2003 designed to increase competition in the Texas insurance market and lower premiums has not worked.
“There’s a lot of room for these new upstart companies to come in and start slashing prices and grab a bigger share of the market,” Sen. Kim Brimer, R-Forth Worth said. “Why isn’t that happening?”
Texas Department of Insurance Commissioner Mike Geeslin said the bill has had results — 29 companies have entered the market and homeowner premiums have decreased six percent in the last five years, he said.
But Brimer said that rate relief has not come fast enough for Texans, who pay among the highest homeowners premiums in the country.
“You’re not moving fast enough, why can’t we move faster?” he said.
The problems partially stem from the ballooning liabilities of the Texas Windstorm Insurance Association (TWIA), a public-private partnership that provides “last resort” hurricane coverage to coastal residents, Geeslin said. As TWIA’s liability has tripled to $65 billion since Hurricane Katrina hit just three years ago, smaller insurers have become wary of entering the Texas market because they would have to front money to TWIA in case of a catastrophic storm, Geeslin said.
The commission will make its final recommendations on issues discussed at yesterday’s meeting on Sept. 23.
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