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House floor debate contentious over amendment

By J. Lyn Carl,

Austin, TX – "This is the first step in what I hope will be significant reform in homeowners insurance," said Rep. John Smithee (R-Amarillo) as the House today took up SB 310, the session's first insurance bill to arrive on the floor of the House.

The bill is on a fast-track in the legislature after Gov. Rick Perry declared insurance legislation as an "emergency" item. It was passed out of the Senate less than a week ago.

The bill, said Smithee, allows the Texas Department of Insurance (TDI) to obtain data that previously has been difficult to obtain.

"This is a first step - and a small step," said Smithee, "but a necessary first step."

Smithee, sponsor of the bill in the House, said the legislation will help reduce homeowner insurance rates in Texas, help bring stability and predictability to the Texas insurance market, and provide both a short-term and long-term solution that will help create a "good, vibrant market."

Rep. Steve Wolens (D-Dallas) said insurance rates in Texas, "Have Texas number one, when we ought to be 50th." He noted Texas insurance rates are almost double the national average. He said the bill "will help us learn the basis for these high rates we're incurring throughout Texas."

The bill did not pass to third reading without comment - or amendments. And some amendments did not pass without discussion - often loud discussion.

One of the most contentious amendments came from Rep. Senfronia Thompson (D-Houston). She called her amendment the "Enron-Arthur Andersen Ethics Amendment," because it would require insurers to report to TDI information on their stock market activities. It would then require TDI to make a summary report to the Legislature. "Legislators need to know how much of our current insurance crisis is due to irresponsible and risky investments by insurers," she said.

Smithee objected to the amendment, saying the information sought in it is not part of the "critical" information needed.

"This information seems relevant to me," said Wolens in defense of Thompson's amendment, "because they (industry) can ask for rate increases based on market losses." He said this information also would be helpful as the legislature prepares to debate other insurance legislation later in the session.

Calling the insurance industry a "secret organization" because he said 95 percent of policies are written outside the jurisdiction of TD, Wolens said, "It is written outside the law," he said.

Smithee said the information Thompson seeks can already be gleaned by TDI, although it might be difficult.

"It's impossible. It's not difficult," said Wolens.

Smithee called the Thompson amendment and the information it requires "overkill."

"Every one of us represents people who are really hurting on homeowner insurance," said Smithee. "They not only expect us to do something, they demand it." He said all he wants is to get necessary information to TDI as quickly as possible and is not interested in political jargon or semantics to do that.

The Thompson amendment was tabled and the bill was passed to third reading.