In July, several concerned Texas consumers sent an email to Texas Department of Insurance Commissioner Eleanor Kitzman suggesting solutions to the challenges facing the Texas insurance market. Here are some of the proposed suggestions.

  1. Empower consumers to generate real price competition by requiring carriers to offer a standard policy, allowing consumers to make meaningful apples-to-apples comparisons.
  2. Stop insurance companies from shifting more of the burden onto consumers by continually raising deductibles.
  3. Make the market more transparent for consumers by requiring insurance companies to clearly state what is and is not covered, disclose the true dollar-amount of deductibles, and provide easy access to review the current policy and endorsements in effect.
  4. Standardize insurance rate filings so that carriers are required to give all relevant information and justifications for rate hikes with their initial filing.
  5. End exotic off-shore reinsurance arrangements that allow insurance companies to pad their profits.
  6. Rein in excessive underwriting profits and administrative costs from insurance
  7. Require insurance carriers to rely on legitimate long-term loss experience when estimating weather-related risks. One bad storm does not justify a steep rate hike.
  8. Closely review the entire market to ensure current rates are justified.

While these suggestions are all headed in the right directions, some of them are impractical, if not entirely unreasonable. TDI Commissioner Kitzman responded on August 6th, and you can read all of her responses here.

Next week, I will write about the commissioner’s responses and explain why I agree or disagree. In the meantime, make sure your friends and family living in Hurricane Isaac’s path are safe and prepared for the storm.