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December 2008
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Lawmakers make another push for elected insurance commissioner
December 1, 2008 — Two members of the Texas House of Representatives have filed bills to elect, rather than having the governor appoint, the insurance commissioner—arguing now is an appropriate time to act since the Department of Insurance will undergo “sunset” review during the 2009 legislative session.
Similar legislation failed two years ago, but supporters of the proposed change argue consumers are paying too much for coverage, especially on homeowners' and healthcare policies.
The workers’ compensation commissioner also is appointed by the governor, but the Division of Workers’ Compensation won’t be up for sunset review until the 2011 legislative session. The author of last year’s legislation says he’s willing to look at whether to switch how the head of the DWC is chosen.
Since the division and department are intertwined on such issues as workers’ compensation healthcare networks, review of rates and research activities, stakeholders are keeping an eye on issues affecting the department’s operations—and monitoring whether those issues may spill over into the division’s operations.
Rep. Mark Homer, D-Paris, a member of the House since 1999, told WorkCompCentral that he believes having an elected insurance commissioner would give average Texans a greater voice in shaping policies that affect their insurance rates.
Homer noted that he is a Sonic franchisee and a nonsubscriber to the workers’ compensation system. His employees are covered under a federal Employee Retirement Income Stability Act (ERISA) plan, he said.
One difference between his bill and Gutierrez's is that Homer’s House Bill 173 provides for the election of the commissioner in nonpresidential general election years, whereas HB 129 by Gutierrez would have commissioner’s race in presidential election years, Homer said.
First-term Rep. Roland Gutierrez, D-San Antonio, said recent reports show that Texans “continue to pay more than twice the national average to insure their homes and 40 percent more today than they did just five years ago to provide healthcare for their families.”
Gutierrez introduced his proposal to elect the commissioner along with a pack of other insurance reforms, saying that the Sunset Commission review process creates “an appropriate time to push for lower rates, better coverage, and new accountability measures” for the department.
Homer’s HB 3323 died in the House Insurance Committee during the 2007 legislative session, although Rep. John Smithee, R-Amarillo, chairman of the committee, had signed as a co-author.
The United Labor Legislative Committee (ULLCO) was among supporters of the legislation. ULLCO argued that “insurance regulation, and more generally, the management of risk in Texans' lives, is fundamental enough to what state government does to merit direct election
Proponents of the legislation noted Texas currently elects its agriculture commissioner, commissioner of the General Land Office and three members of the Texas Railroad Commission among other statewide officials – including Supreme Court justices and Court of Criminal Appeals judges.
Earlier this year, Sen. Juan (Chuy) Hinojosa, D-McAllen, in a letter to the Sunset Advisory Commission, noted that 11 other states have an elected insurance commissioner—and reported that on average, consumers in those states pay 43 percent less for their homeowners' insurance and 12 percent less for their healthcare coverage than Texans.
Several other senators have indicated they are concerned that changes in insurance laws in 2003 haven’t produced the reductions in rates which had been anticipated for in increased competition among insurance carriers.
Sen. Leticia Van de Putte, D-San Antonio, in comments to the commission, suggested it is “time to investigate returning to some form of prior approval system that will bring insurance rates down.”
Van de Putte also registered her support for a proposal by the commission staff to bring all preferred provider organizations (PPOs) under state regulation. Currently, four out of five insured Texans receive their healthcare through PPOs.
Insurance industry representatives have indicated their opposition to a prior-approval system, arguing that the current file-and-use system needs to be given more time to work and demonstrate its benefits.
At a Sunset Advisory Commission meeting this summer, Insurance Commissioner Mike Geeslin, who was appointed by Gov. Rick Perry (R), reported that homeowners’ insurance rates have decreased 6 percent in the last five years. Geeslin also noted that 29 insurance companies entered the Texas market during that period.
However, the commission reported that “protracted legal fights” with some insurers have delayed efforts to bring rate relief to consumers, along with a “tightening insurance market” in the Gulf Coast area. Geeslin made his comments before Hurricane Ike struck the Texas coast in September.
On the question of electing or appointing the insurance commissioner, Gov. Perry’s office has told reporters the governor believes the current system is working and that he doesn’t see any need to change it.
Some insurance industry representatives report they don’t have strong feelings regarding having an appointed or an elected commissioner—if the commissioner is fair in balancing the interests of insurers and consumers.
However, some have expressed concern – speaking on the condition they not be identified—that making the office elective would politicize it, and result in candidates having to turn to special interests to finance statewide campaigns.
Source: Texas Chiropractic Association, www.chirotexas.org
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