Welcome to Consumer Reports Advocacy

For 85 years CR has worked for laws and policies that put consumers first. Learn more about CR’s work with policymakers, companies, and consumers to help build a fair and just marketplace at TrustCR.org

Insurance ‘Reform’ Misses the Mark in Texas

June 10, 2003

Consumer Groups Claim Insurance Reform is “Not Finished,” Call Perry’s Signing of Insurance Law “Missed Opportunity”

(AUSTIN, TX) – Leading consumer groups are calling Governor Perry’s signing of insurance reform legislation a “missed opportunity for Texas homeowners.” They expressed disappointment at what the Legislature and Governor embraced and said there is a great deal of “unfinished business” in the area of insurance reform for Texas families.
“The Legislature and the Governor have failed to live up to their promise and voters’ expectations,” said Dan Lambe, Executive Director of Texas Watch. “If elected officials would have listened to Texas homeowners more than they listened to the insurance industry lobby, we would have a much better product and Texas families could be expecting real relief.”
“Texans have been waiting more than two years for relief from an insurance crisis caused for the most part by the insurance industry,” said Rob Schneider, Senior Staff Attorney for Consumers Union Southwest Regional Office. “But instead of real relief, the Legislature has passed, and now the Governor has signed, watered down insurance reform which fails to meet the expectations of Texas families. Unfortunately, the job of insurance reform is not done.”
Consumer groups worked this session to pass specific meaningful reform measures including: a guaranteed rate rollback for Texas homeowners, true prior approval of insurance rates, and a ban against the use of unfair underwriting practices such as credit scoring to sell and price insurance. The Texas Poll, over the past several months, has indicated that Texans overwhelmingly support these reforms. Unfortunately, the Texas Poll also revealed that a majority of Texas voters doubted that the legislature would pass insurance reforms that truly help them.
“Texans have stated loud and clear that they need real relief from our state’s insurance crisis,” said Gus Cardenas, state President, AARP Texas. “We heard promises from elected leaders that they would pass insurance reform to bring down insurance rates. But this plan falls short of the potential and the promise for Texas voters.”
“This legislation fails to guarantee a rate rollback, does not require true prior approval and legalizes the use of credit scoring,” continued Schneider. “There is more work to be done for Texas families, insurance reform is not complete.”
“Without question the most significant item that is missing in this legislation is a guaranteed rate rollback,” said Cardenas. “Homeowners suffering from insurance rate shock were looking for help, and somehow it is missing in this final legislation.”