Gov. Perry Announces Help to Homeowners
The message to Texas homeowners is clear: Help has arrived.
Today, I am signing a comprehensive reform measure that will stabilize the home and auto insurance market, rid the insurance industry of fraudulent practices and ensure Texans have access to fair rates offered in a competitive market. For some Texans, that will mean significant rate discounts. For all Texans, it will mean rate practices that are transparent and fair.
Senate Bill 14 provides that – for the first time ever – rate standards will apply to all homeowner and auto insurance companies with no exceptions, and no loopholes. And all future rates must be fair, reasonable and justified. If future rates are unfair, the Department of Insurance now has the authority in law to reject excessive rates out of hand and force insurance companies to offer lower rates.
This landmark reform legislation is about making insurance practices transparent, regulated and reasonable. Consumers will have access to more choices than before, even in a regulated marketplace.
Continuing on the progress we made last year, insurance companies will be able to offer more coverage forms so consumers can tailor policies to meet their needs. And no forms will go into effect without the stamp of approval of the Department of Insurance. These reforms will help ensure the insurance marketplace is open to stiff competition so that market-share power is not harmful to consumers.
For the first time, insurance companies will have to disclose credit scoring models so that policy-holders and the Texas Department of Insurance can evaluate credit scoring methodologies utilized by insurance companies.
Credit history can not be the predominant factor in setting rates, and links between rates and credit history must be proven and justified. This means the senior who has a history of living on cash will not be penalized for a lack of credit history. The Texan who suffers financial hardship because of a medical condition will not be charged higher rates based on their misfortune. And Texans will be proud to know that it will now be a state jail felony for any company to offer prices based on race.
I am also proud to sign today two other insurance reform measures that will protect Texas policy-holders.
House Bill 329 protects consumers by preventing repaired mold claims from stigmatizing the value of a house, while also protecting consumers from unscrupulous mold remediators.
Senate Bill 127 requires the licensing of qualified public adjusters and gives the Department of Insurance the authority to impose strict standards for the settlement of water claims.
All of these reforms are balanced. They put the consumers first without chasing companies out of the market and leaving policy-holders to hold the bag.
And none of this would have been possible without the long hours and hard work of four individuals I want to single out: Speaker Tom Craddick, Sen. Troy Fraser, Sen. Mike Jackson and Rep. John Smithee.
To these fine legislators I want to offer my congratulations on a job well done.
Governor's Initiatives »