The Senate of Texas has passed a new insurance bill that has been the subject of a great amount of controversy. The bill will extend the life of the Texas Department of Insurance and will impose stricter guidelines on the agency itself. Previous to the bill’s passage, a number of amendments were proposed to make the legislation more consumer friendly. Each amendment was rejected, however, as they were deemed unfruitful to the state’s insurance industry.
The state’s Democrats were behind the amendments to the bill. They argue that their propositions would have helped protect consumers from insurance companies that sought to overcharge or otherwise take advantage of their customers. The chief amendment would have required insurers to obtain approval from the state’s Insurance Commissioner before raising premiums.
Nearly every amendment was rejected by the Republicans, who hold majority in the House. They insist that the current system is functioning as intended.
The new law shortens the time in which the Insurance Commissioner has in determining whether to approve or deny rate increases. Previously, the commissioner could take as long as they wanted. Now, they are subject to a 30-day deadline. However, after a rate proposal is submitted, insurers do not have to wait for approval before imposing higher rates, a fact that many find unreasonable.
Opponents of the bill say that it will also keep new companies from entering the market and competing with already established insurers. Republicans believe that the bill will, in the long run, prove to drive more affordable prices as they insist it promote competition.