Editorial

You know that a problem has spun pretty thoroughly out of control when you find yourself thinking, “Hey, maybe a Texas election can fix it!”

That’s the conclusion that many folks-Democrats and Republicans alike-have reached when it comes to bringing down the state’s gravity-defying insurance rates. Texans pay the highest home-insurance premiums in the country-almost twice the national average. Even after the much-ballyhooed “regulation” in 2003, prompted by rate hikes so extreme that even Gov. Rick Perry was forced to feign outrage, the Good Hands people of Texas have hauled in well in excess of $11 billion more than they’ve paid out in claims.

That’s after Rita and Ike. It’s a profit margin that would make Sir Allen Stanford beam with pride. It’s the reason there’s a decent chance that Texas legislators will change the state’s insurance commissioner from a gubernatorial appointee to an elected official. And it’s the reason why they should.

The Lege is being forced to take a long look at the state’s wacky insurance system because the Texas Department of Insurance is under Sunset review. Just as there’s no shortage of kinks in the system, there’s a plethora of solutions being floated. Among the most essential: Do away with the file-and-use system instituted in 2003. Under file-and-use-I kid you not-insurance companies don’t have to justify rate hikes or ask anybody for permission. They simply have to inform the insurance department politely, as the massively profitable Farmers Group Inc. did in December after it decided that a double-digit rise in home-insurance premiums was just what its customers needed as the economy imploded. Dear TDI, we are delighted to announce…

The cure for file-and-use is “prior approval.” In this case, the name speaks for itself: Insurers would have to request a rate increase and make the case for it. This is a no-brainer-which is, of course, no guarantee that it will pass muster in the Lege. If it does, it would be mighty helpful if the approval has to be granted by an elected commissioner.

Eleven states elect their insurance commissioners. Consumers in those states pay an average of 43 percent less for home insurance and 12 percent less for health care coverage than Texans. As Jay Angoff, a former consumer advocate who battled insurance giant Blue Cross and Blue Shield as insurance commissioner in Missouri, points out, that should come as no great surprise. “When an insurance commissioner is appointed, the commissioner answers to the governor. An elected commissioner answers to the public.”

The notion of electing a commissioner strikes some people as going from reliably bad to potentially worse. After all, Texans do not exactly have a pristine record of voting for selfless public servants. Besides, “Who is going to contribute money for the candidates for insurance commissioner?” Texas Monthly blogger Paul Burka recently asked rhetorically. “Insurance companies.”

But legislators are proposing limits on campaign contributions. And commissioner candidates can use their opponents’ industry funding against them. In Kansas, Kathleen Sebelius-now the nominee for U.S. secretary of Health and Human Services-did just that when she refused to take insurers’ contributions and got herself elected commissioner in a heavily Republican state.

Ultimately, the best reason to take a democratic leap of faith was expressed by one of Burka’s anonymous respondents: “Do you have any idea how bad we’re getting screwed under the current system? Answer this question: How could introducing some measure of accountability possibly make the situation any worse?”

-Bob Moser