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Relating to certain practices in the business of personal automobile insurance based on certain customer inquiries.
No fiscal implication to the State is anticipated.
Chapter 544, subchapter L of the insurance code prohibits insurers from making rate changes on a policy based on a consumer inquiry on their policy. Additionally, chapter 551, subchapter C prohibits insurers from cancelling or not renewing a policy based on a policyholder inquiring into a claim or policy. SB 189 would include policies for automobile insurance and policies written by county mutual insurance companies.
In the committee substitute of the legislation, a county mutual insurance company is subject to additional regulations. Most of these regulations give the Texas Department of Insurance (TDI) the authority to audit and examine county mutual insurance companies.
Finally, SB 189 amends a law prohibiting certain rating plans. Specifically, Section 1953.051(b) now prohibits insurers of automobile insurance from making a rate change to a policy on the basis of a policy holder filing a claim that is not covered by his or her policy.
The author of the bill hopes to regulate automobile insurance and county mutual insurance companies that currently fall outside the purview of the law that prohibits an insurer from raising fees on homeowners because they asked questions about a claim or policy. The government should not be in the business of the insurance industry. It is definitely not the job of the government to stipulate how a private entity decides to run their business or whether it is financially viable.
This bill broadens the parameters of existing statute to move in the direction of greater regulations. This continues to perpetuate infringement on the free market and grows government. For these reasons, we do not support SB 189.
Insurance should operate on free market principles allowing companies to compete for business by offering the best, most innovative plans with the flexible options consumers want at the lowest cost possible on terms people are willing to accept. Under such circumstances regulations could be light, sensible, and minimally invasive for businesses and customers alike.