Insurers A Dirty Word In Texas Campaign

By Daniel Hays

NU Online News Service, June 14, 4:06 p.m.EST?The Texas gubernatorial race from an insurerstandpoint has sometimes looked like a contest to see whichcandidate could do the most to disparage them.

But the political combatants were unclear recently when askedwhether insurers would continue to remain a hot button issue in thecampaign. Democratic challenger Tony Sanchez has periodically firedblasts at both the industry and Republican Gov. Rick Perry oninsurance issues, but his campaign played it coy when asked how biga factor the topic might be in the future.

Mark Sanders, a representative for Mr. Sanchez, said he couldnot say if insurance would be a recurring theme because it's aquestion of "strategy."

However, the week Mr. Sanders was interviewed, the Sanchez WebSite was featuring as its lead news item a Dallas MorningNews story headlined: "Homeowner Premiums Skyrocket."

Mr. Sanchez, in addition to speaking out on homeownersinsurance, has been raising questions about health insurance.

However, Ray Sullivan, a representative for the Perry campaign,said that at this point, the issue has not "gained traction." Pollresults at the end of last month gave Mr. Perry a 25-point leadover Mr. Sanchez.

Among some political observers, insurance has been seen as anissue with potency ever since Democrat Jim McGreevy, in his 1997gubernatorial election campaign in New Jersey, came close tounseating Republican Gov. Christie Whitman using the issue of highauto insurance rates. In his second run against Jersey City MayorBrett Shundler, however, he did not raise the issue.

Mr. Sanders said he was "not familiar" with the McGreevyexperience. Mr. Sullivan said there are "probably very fewpolitical similarities between New Jersey and Texas, but we areaware of the potency of that issue."

Hit by expensive mold remediation claims, property insurers havebeen hiking their policy costs, and both candidates began puttingout press releases on the topic of homeowners insurance at thebeginning of the year.

On Feb. 12, Gov. Perry called on the state attorney general toinvestigate the marketing practices of the three largest insurancecompanies, warning that it was time for the insurance market to geta correction. "And if the insurance companies do not do it, thestate will do it for them," he declared.

That same day, Mr. Sanchez announced he was renewing his callfor property insurance company reforms and more regulation. "I'mtired of seeing insurance companies come into the state, take ourmoney, then raise prices while they reduce coverage," heannounced.

Mr. Sanchez in April attacked Gov. Perry with a charge that hevetoed prompt medical payment legislation because "it is clear hewas influenced by HMO contributions and ties to theirlobbyists."

Then last month Gov. Perry took note of findings from hisattorney general that some companies were engaging in unfair orfraudulent pricing practices, and applying inconsistent creditscoring practices that discriminate against some consumers.

Gov. Perry said he was proposing giving the Texas Department ofInsurance power to review all rates and impose rate freezes. Healso called for setting limits on credit scoring use, allowing morechoice in homeowner policy language, and employing tort reformmeasures to prevent claim inflation.

The governor also said that insurers should "listen up," because"Texans are fed up, and I will sign legislation that prevents ahandful of companies from bringing the state to its knees."

Industry response was carefully measured. The NationalAssociation of Independent Insurers, based in Des Plaines, Ill.,announced that they agreed that new policy forms would increasecompetition in the homeowners insurance market.

Meanwhile, Mr. Sanchez went on the attack, denouncing Gov.Perry, charging that he should have called a special session of thelegislature to deal with skyrocketing rates.

The governor won't call a special session, he added, "because hewas bought and paid for by the very insurance industry he now sayshe wants to regulate?Rick dances to the tune the insurance industryplays because they are financing his campaign with hundreds ofthousands of dollars."

Mr. Sullivan, speaking for the governor, said it was "ironic"that Mr. Sanchez would attack on the issue "since his bank ownsinsurance agencies and he is personally profiting from higherinsurance rates."
Mr. Sanchez' Laredo, Texas-based IBC Bank "does have a brokerage,but they don't set rates. It's just a brokerage house," shot backMr. Sanders.

Mr. Sanchez's comments got some support from a consumeradvocate. D.J. Powers of the Center for Economic Justice in Austin,Texas said that if Gov. Perry "cared about consumers gettingovercharged, he would have raised this issue when it allstarted."

Mr. Sullivan said no special session was called because theissue was complicated and needs "analysis and consensus building"that can't be rushed in a short special session.