ustxtxb_obs_1993_04_23_50_00011-00000_000.pdf

challenging their rate recommendations and their rule-making suggestions and they don’t like it,” Hildreth said. “What is going on is the insurance industry has brought its wish list to this committee,” Hildreth said of the amendments. Korioth seemed to concur. “They’re basically trying to gut the reforms,” she said. The reforms Korioth described were enacted two years ago, when the Legislature enacted House Bill 2, the major reworking of the industry and its regulatory process. H..B. 2 was the cornerstone of Governor Richards’ first legislative agenda. Tom Bond, a former state insurance commissioner who works as an insurance industry lobbyist, described the criticism as unfair and uninformed. “When House Bill 2 was passed two years ago, we were told that if you get any problems you can bring them to sunset,” Bond said. “You can’t write 600 pages of law in one session and not expect some changes.” According to Bond, the members of the House and Senate conference committee “left the door open” for the industry to come back with its problems. Sunset is the process by which ‘government agencies are periodically examined and reauthorized. Kim Yelkin, an Akin, Gump lawyer who works as an industry lobbyist, agreed with Bond. “I’m surprised at their reaction,” Yellin said. “The, sunset process was accelerated from ’97 so they could see if the reforms were working. … We alerted members of the board. I told Amy where we would be drawing our lines in the sand.” Yelkin, whose office coordinated the presentation of the industry’s amendments at the request of Representative Counts, said most are “technical” in nature and have little to do with major changes in regulation of the industry. There are four or five basic changes around which there is industry lobby consensus, Yelkin said. Among those changes are: The expansion of the role of industry advisory groups in the rate hearings process. The removal of rate-making hearings from the Administrative Procedure and Texas Amy Johnson CARMEN GARCIA . . ‘Returning to insurers and underwriters the responsibility for industry data collection, upon which rates are based. At the insurance committee hearing, Korioth told AustinAmerican-Statesman reporter Bruce Hight that she was most concerned about amendments that would allow industry advisory groups once again to pool and share information from various insurers. Before the enactment of H.B. 2, advisory organizations presented requests for rate changes after pooling information gathered from their members. Many, like Korioth, contend that the practice represented a form of collusion. “By allowing them to come in through advisory organizations, they’re seeking a waiver from the anti-trust law,” Korioth said. “We believe that insurance companies should take responsibility for their own acts and be able to speak in their own voice.” Many consider the limitations placed on advisory groups one of the fundamental changes included in the 1991 insurance reform package. Removal of benchmark rate hearings from the APTRA process, as proposed by industry lobbyists Jay Thompson and Dick Geiger, would limit the insurance counsel’s power of discovery, that is, the authority to request informa tion from applicants seeking rate increases. The same amendment would also allow insurers to increase rates outside the “flexibility bands” established by H.B. 2 without requesting prior approval from the board. Ann Richards’ first public speech as governor included the promise that the government would be much more involved in the collection of data upon which insurance rate increases are based. Historically, industry organizations provided all the information to the insurance board. Insurers are currently undergoing a state audit of that information, a process which seems to anticipate that the State Department of Insurance will develop its own system of examination and data collection. Other proposed amendments to the Department of Insurance Sunset Bill include a number of amendments that seem to be more than technical adjustments: An amendment by lobbyists Mark Toohey and Fred Werkenthin would essentially deregulate automobile and homeowners rates, allowing companies to simply “file-and-use” new rates. The public counsel could contest the rates only after they are in effect. The large number of rate requests could bog down the public counsel’s appeals, leaving consumers paying higher rates than can be justified. An amendment by lobbyists Wayne Stratton and Dick Geiger would allow insurance companies to use any policy form they prefer, if the form meets board requirements. Standardized forms now required allow consumers to compare more easily the rates and coverage offered by different companies. They also make data collection easier. Another amendment by lobbyists Toohey and Werkenthin would remove a private citizen’s right to sue in respect to a company’s violation of a board rule, even if the party was damaged as a result of the rule violation. The amendment also seems to leave no role for the attorney general to intervene. An amendment by lobbyists Jay Thompson and Geiger “clarifies [that] OPIC won’t have standing in individual company matters.” The amendment would severely limit OPIC’ s standing before the insurance commission when an individual company is making a request that might affect consumers. Very few amendments were laid out and discussed at the initial meeting of the Insurance Committee, and some amendments will be “pulled down,” according to lobbyists and legislators. The committee was scheduled to reconvene on the Monday after Easter but later rescheduled its second meeting for April 15. Both the insurance industry and consumer organizations will have used the time to regroup. Not Amy Johnson, though. A week after the first skirmish before the insurance committee hearing she was informed that she will have to appear again before the Senate Nominations Committee for further questioning this time by the committee Vice Chair, Waco Republican David Sibley. Lobbyist Robert Sneed and Public Counsel THE TEXAS OBSERVER 11