This morning I joined others in our industry to share with the Texas Department of Insurance why their current proposed rules are bad for Texas consumers.
Alinsco's Paul Harrison, The Insurance Council of Texas, ACCC and Independent Insurance Agents of Texas also offered great testimony as to the misinterpretations of the law by TDI. There was only one person offering a difference of opinion and he was with a watchdog group.
No matter their final decisions we'll be prepared to help you assist your clients through the change, should there be one. But, it was with conviction of what is best for our clients and agents that I shared the following at the hearing.
"Good morning Commissioner. Let the record show , my name is Don Owens, I am with Empower Insurance from Fort Worth, Texas. I am here to share some thoughts on behalf of the 150 people I serve with in our small business, but moreover, the 150,000 Texas drivers we serve. All of these people will be affected by the proposed rules demanding a new signature at every renewal including Karina and Ernesto Jaquez of El Paso...and Ill share more of their testimony in a moment.
We've had the privilege to provide hundreds of thousands of people in Texas with auto insurance coverage at affordable premiums via independent insurance agents over the last eleven years. We provide the underserved markets with a limited form program that varies in cost from a standard personal auto policy by 10-15%. For our client, this is the difference between being able to pay a light bill or buying extra groceries.
Mr. Mark Worman stated at the TDI Compliance Conference this year that insurance companies can adapt to the rules as written. He is right. The proposed rules concerning Named Driver policies are not difficult for our company. We have the ability to adapt, to add technology and to respond. However, an interpretation of the law demanding a signature at each renewal will be harmful to 150,000 of our drivers in Texas and millions more. The confusion this creates and the burden of time and action it requires will increase the rates for many and cause others to go uninsured. A change to decades of a simple pattern of renewal is problematic.
Our insureds, and millions of other "limited form" clients have never in their lives had anything presented to them at renewal demanding they take action to agree again, and then at the next renewal agree again. They go down to the local cash store each month and make a payment; or they have their credit card or checking account drafted. They don't repeatedly fill out the same form, visit their agent or make a call to have something read to them again, and then have to mail that same document over and over.
Our clients make a decision about coverages, as do all Texans at the inception of their policies. Like all Texans they elect the coverages they wish to pay for and the discounts they wish to receive - But now, the presented interpretation of this law demands that the least fortunate, hardest working, minority buyers have to stop in the middle of their busy lives and remember to go listen to a line read to them, sign a new form about something which they already agreed to and signed, and mail a new signature back every month. It is insult to their intelligence and choices. It puts an extra demand on the poorest in our state that are looking to save money while acting in good faith. We don't demand an affluent buyer to resign his PIP an UM rejections at every renewal, or make them sign again at each renewal that they can't use their vehicle for product delivery.
The interpretation as proposed assumes the inability of certain people to make decisions, think for themselves, and will catch them unsuspecting of the demand for a new response.
Mrs.Karina Jaquez told us that this requirement will be a hardship on her. After a year of going without insurance, our policy made it affordable for her and Ernesto to buy coverage. She sends her daughter to make the monthly payments on her insurance, but her daughter is not on the policy so can't take the actions demanded. She states it makes no sense to advise her of anything at renewal unless there has been a change in her coverages. If she can't meet the demands at each renewal of going in to listen to the line read to her and sign the form she is concerned she may not be able to afford the coverage without the limited form endorsements.
SB 1567 is a bill we supported. We think full disclosure is of the utmost importance. At Empower, we have provided a disclosure form, and required a signature, since our first limited form policy in 2007. We've been one of the companies that over the last several years has made insurance affordable to people struggling to simply put food on the table. The rules as proposed, burdens those most burdened already.
To interpret this law in a way that demands more of a struggling family and their choices for car insurance than that of an affluent family and their choices for car insurance is a poor interpretation. Texas consumers, carriers and agents are required to provide honest answers to honest questions when purchasing a policy. The demand for signature again at renewal is not a disruption to the carriers; it is a new, troublesome, problem creator for Texas consumers.
Please remove this burden from your rule making, and put your faith in Texas consumers to make the choices that are right for them at the inception of their policy.
Thanks you for your time and service to the State. I am available for questions."