Democrats' reversal frees blocked bill on insurance

Revised: 09/22/2006

By JANET ELLIOTT
Copyright 2003 Houston Chronicle Austin Bureau

AUSTIN -- Cracks appeared Monday in the united front that Senate Democrats presented last week to block debate on a homeowners insurance bill that is now expected to reach the Senate floor this week.

Sen. John Whitmire of Houston, chairman of the Senate Democratic Caucus, said he has been advised by several Democrats who have been working on the bill that they are ready to move forward and try to alter the measure through floor amendments.

Some of the issues that Democrats were concerned about were hashed out last week in a series of questionable, closed meetings that included a quorum of the Senate committee that had approved the bill. The meetings called by Lt. Gov. David Dewhurst were defended by the Senate parliamentarian after being questioned by at least one senator.

Sen. Troy Fraser, a co-author of Senate Bill 14, said he left when he saw a quorum of his Business and Commerce Committee. Senate rules require that all committee meetings be posted to the public 24 hours in advance and be open.

"I thought it was a bad idea," said Fraser, R-Horseshoe Bay.

Fraser said he returned to the meeting after Senate Parliamentarian Walter Fisher assured him it was proper.

Fisher said there was no violation of the rules because SB 14 already had been passed by the Business and Commerce Committee.

Fisher said previous lieutenant governors have used working groups.

"My opinion is that the open meetings act doesn't apply to legislative committees and certainly not to information gathering by the lieutenant governor," he said.

The issue of private committee meetings arose last week in the House during debate over a bill writing civil liability laws. Travis County District Attorney Ronnie Earle began investigating whether the House Civil Practices Committee violated state open meetings laws during a closed meeting on pending legislation.

Lobbyists for insurance companies and consumer groups attended some of the closed meetings that Dewhurst began on March 25, one day after he received a letter signed by 11 of 12 Senate Democrats.

The Democrats criticized SB 14 as lacking consumer safeguards and said they would vote to prevent the bill from being brought up for floor debate until it was improved. Under Senate rules, 11 senators are enough to block debate indefinitely.

Fraser said he agreed to make some changes in the bill to require insurance companies to disclose how they are using credit history to set rates. The insurance commissioner also would be given authority to set the minimum and maximum adjustments that an insurer could make because of a policyholder's credit rating.

Democrats had demanded a rate rollback and removal of a provision that would deregulate auto insurance. One of those lawmakers, Sen. Leticia Van De Putte, said she changed her mind about blocking the bill and now believes it may be strengthened through amendments offered during floor debate.

"I think there are enough folks who now feel a little bit more confident in what we're bringing to the floor," said Van De Putte, D-San Antonio.

She said that with both consumer groups and the insurance industry opposing the bill, "we may have found the middle ground here."

"It does no good for us to be so overregulated that nobody wants to write" policies, said Van De Putte.

Sen. Mario Gallegos, D-Houston, said he still is not satisfied with the bill and will vote against bringing it to the floor.

Fraser said he hopes to have the 21 votes he needs to bring the bill up for floor debate either today or Wednesday.

Dan Lambe of Texas Watch said consumers want rates rolled back and credit scoring banned.

"This is not the type of reforms that Texas homeowners desire and that they were promised during the campaign," said Lambe.

Under SB 14, the insurance commissioner would have 30 to 60 days to approve or reject homeowners or auto rates proposed by an insurer. If the commissioner failed to act within 60 days, the rates would automatically go into effect.

Last month, Insurance Commissioner Jose Montemayor testified that homeowners rates have increased an average of 38 percent since 2000. Homeowners insurance regulation has been declared an emergency by Gov. Rick Perry.

"We want to see a bill passed that's fair to consumers, that's fair to insurance companies, that provides more competition, that at the end of the day will lower insurance rates," said Dewhurst.

An online information service of the United Farmers Agents Association, Inc.