Texas Gov. Rick Perry signed into law Senate Bill 310, which require insurers writing homeowners policies in Texas to provide data used in setting rates. Information gathered under Senate Bill 310 will help lawmakers analyze current rates and strengthen insurance rate oversight in Texas.
The bill is the first insurance legislation to be signed during 78th Legislature, which has long been expected to be “insurance heavy.” In January Perry pronounce homeowners insurance an emergency issue.
Lt. Gov. David Dewhurst and House Speaker Tom Craddick attended the bill signing ceremony at the State Capitol.
“For too many Texans, the cost of owning a home has become decidedly more expensive because of soaring insurance rates,” Perry said. “Even more upsetting for many Texans is that there seems to be little or no explanation for skyrocketing rates. That’s why the first bill I have signed into law will open up the books of the largest homeowners insurance companies.”
Senate Bill 310, sponsored by Sen. Troy Fraser, R-Horseshoe Bay, and Rep. John Smithee, R-Amarillo, requires insurers to submit rates and supporting data, including current rates and estimated rates to be charged over the next six months. The information will be compiled by the Texas Department of Insurance over the next 30 days.
“Texans will judge whether our efforts are successful by one standard: whether we lower their rates,” Perry said. “And I won’t be satisfied until Texas homeowners get the rate relief they demand and deserve.”
“I applaud Gov. Perry for his leadership by putting insurance legislation on the fast track,” Fraser said. “The governor’s signature on Senate Bill 310 represents the first step in bringing about insurance reform because it requires insurance companies to open their books and show us whether consumers are being treated fairly.”
“I commend the Senate and the Governor for taking such a systematic approach to insurance reform that will not only work to resolve the short-term crisis, but will create a long-term solution that will benefit all Texans,” Smithee said.
After compiling the information, the insurance commissioner will submit a final report to the governor, lieutenant governor, speaker of the house, and members of the legislature in late March. Insurers failing to comply with Senate Bill 310 may be subject to administrative penalties and fines.
Currently, 95 percent of homeowners insurance premiums are written by insurers that are not rate regulated. According to the Texas Department of Insurance, the industry has moved most of its homeowners business to unregulated Lloyds and reciprocal exchange companies that are not required to file rate information with the commissioner of insurance.
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