It could be said the first year of Mike Geeslin’s term as Texas Insurance Commissioner was one of “trial by fire.” Gov. Rick Perry appointed Geeslin to the post in June 2005, just months before Hurricanes Katrina and Rita struck the Texas and Louisiana coasts in August and September of that year.
Geeslin, who had served as Deputy Commissioner for Policy at the Texas Department of Insurance since 2003, found himself not only faced with presiding over one of the largest insurance markets in the nation, but directing recovery efforts in Texas for both hurricanes, as well. In addition, a complete overhaul of the state’s workers’ compensation system was initiated in September 2005. Then, less than a year after the hurricane catastrophes, Geeslin was faced with placing one of Texas’ largest homeowners insurers, Vesta Texas Select, into rehabilitation and then liquidation.
In an interview with Insurance Journal’s Stephanie Jones, which took place at the winter meeting of the National Association of Insurance Commissioners in San Antonio, Geeslin discussed those experiences, as well as some of the issues likely to be addressed in the 2007 session of the Texas Legislature.
One issue that’s sure to be considered at the state Capitol this year is that of funding for the Texas Windstorm Insurance Association, the insurer of last resort for wind coverage along the Texas coast. The insurance industry wants legislators to change TWIA’s funding mechanism in order to bolster its reserves, which are currently not at a level that would cover a major storm hitting heavily populated coastal areas. The industry has also pushed hard for rate increases for the Association. In December, Geeslin approved rate increases for TWIA but many in the industry felt the increases were too low.
Geeslin says he’s trying to take a long-term approach to TWIA’s problems, which he says have been 20 years in the making. “It’s grown five times since its inception in terms of the level of exposure,” Geeslin says. “It’s been 20 years in the making, I don’t anticipate that it will be one year in the fix.
“What I’d like to emphasize is that it is going to take us several years with both rate changes as well as statutory changes to try to get some, for example, catastrophe funding mechanisms built in, both pre- and post-event, as well as address the way that the rates are actually set because the statute is very prescriptive in how to go about setting those rates.
“Ultimately what you try to do as a regulator is strike a balance. Strike a balance not just with respect to the times in which you live, but for the times that lay ahead. There are going to be other economic pressures along the coast, whether it’s building expenditures or literally recovery after a storm.”
The complete video interview with Commissioner Geeslin is available at www.insurancejournal.com/broadcasts, in the video section of the Web site.
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