Insurance Task Force

Although the Texas Department of Insurance and the Office of Public Insurance Counsel underwent Sunset review prior to the commencement of the 81st Legislature, the Sunset legislation for those agencies will be reconsidered by the 82nd Legislature, giving conservatives a better opportunity to prepare for the debate and to advocate increased competition through regulatory reform. Ultimately, a free market for insurance products will lower prices to the benefit of consumers.

The purpose of this Task Force will be to study further deregulation of insurance, and especially the experience of the State of Illinois, which is the only state without an insurance rate regulatory law. Illinois has functioned without a rating law since 1971. The relative success of the competitive system has dissuaded the Illinois General Assembly from enacting any rate regulatory law. A case study of Illinois’ open competition approach to insurance will help guide the work of the Insurance Task Force.

The Task Force must also consider the ramifications of proposals that would increase state regulation of insurance through: state promulgated rates and forms; politicizing insurance issues even more by creating an elected insurance commissioner; and, imposing restraints on underwriting that would prohibit the use of risk-based principles on which the viability of insurance is based. These proposals – many of which have been tried and failed – will take Texas back to the insurance crisis that existed in 2001-2003.