I came across this fantastic piece from Dave Lieber of The Dallas Morning News today. The insurance industry, through insurance agency owner and State Senator Larry Taylor, filed a bill which would gut the Prompt Payment Act1 and statutory interest rates on first-party insurance claims2 in Texas. This means there will be no real time limits for insurance companies to pay claims, and no interest accruing while the insurance companies take as long as they damn well please to evaluate and pay (or, as will be more often the case, deny) claims.
The most amazing tidbit here is that the insurance industry, through its GOP talking head, is attempting to claim—with a straight face—that the bill is actually good for Texas consumers. Lieber writes:
Sen. Larry Taylor, R-Friendswood, who owns Truman Taylor Insurance Agency, claims this is pro-consumer.
Taylor said last week in a hearing for his Senate Bill 1628 that he wants to stop the march of lawyers and public adjusters who contact potential customers and offer to help file lawsuits against insurance companies.
The result of this solicitation for business, the senator claims, is that 1 of every 3 catastrophic claims in Texas ends up in court. He warns that if his bill doesn’t pass, insurance companies will cut back their coverage offerings.
‘We need to take care of the consumers on this,’ Taylor said.
Taylor further claims that “[l]awsuit abuse” will drive up insurance premiums or worse, force these poor insurance companies out of business.
Lieber and Texas Watch call out Taylor’s bull (you know what):
You’d think the insurance industry is hurting. It’s not. In the past year, companies writing homeowners insurance in Texas posted $1.4 billion in underwriting profits, Texas Watch says. Auto insurers earned $430 million in profits. And that’s before companies invested earnings for further profits.
The misrepresentations the insurance industry continues to make to the American public are maddening. They’ve been lying to us for years.3 Let’s hope that this bill doesn’t allow them to profit at the public’s expense yet again.
1Tex. Ins. Code Sec. 542.051, et seq.
2A “first-party” insurance claim (as opposed to a “third-party” claim) is a claim for one’s own insurance policy benefits.
3See, e.g., Exposing the Lie of Tort Reform, Larry Bodine, THE HUFFINGTON POST, October 18, 2012. See also, Paik, Myungho, et al., Will Tort Reform Bend the Cost Curve? Evidence from Texas, JOURNAL OF EMPIRICAL LEGAL STUDIES, Vol. 9, pp. 173-216 (2012).