Texas Insurance Dept. Says No Crisis Over Possible Sunset

NU Online News Service, June 3, 1:10 p.m. EDT

Political infighting has left the Texas Department of Insurance facing the possibility of being abolished through legislative inaction, but industry officials say there is no crisis at the moment.

As matters now stand, legislation that allows the department to operate will be allowed to expire September 2010.

The Texas legislature adjourned on Monday without completing a number of legislative items, including continued funding of the Texas Department of Insurance and several other major state agencies.

Their stalemate on legislation stemmed from individual state Senator's objections to language in legislation passed by the House for funding departments threatened with expiration under the Texas Sunset law..

Ben Gonzalez, spokesman for TDI, said the department is continuing its work and expects the governor and legislators to resolve the issue.

"We are not operating as if we were in a crisis," said Mr. Gonzalez. "We think this is just a technicality."

He said the department is operating "today as we did yesterday and the day before. We are still fully regulating insurance, taking consumer complaints and doing what we usually do."

By law, he said the department will continue operation until Sept. 1 before it has to wind down, and that process would take a year. He said the department is confident it will hear from the state leadership long before then.

More than 150 departments in Texas are reviewed by the Sunset Advisory Commission every 12 years. In its report, the commission said "the agency works well" and made a number of recommendations to improve services and transparency for TDI.

Texas Gov. Rick Perry, in the text of a speech he gave the day following the legislature's adjournment, praised the body for the work it did finish, but said of its unfinished work, "I want to ensure our citizens and the employees of these agencies that Texas will continue to build and maintain roads, regulate the insurance industry, and provide essential services while we work with agency leadership in the coming days to choose the best of our many options."

Mark Hanna, spokesman for the Insurance Council of Texas, agreed the situation was not a crisis and that the governor is probably letting the dust settle from heated legislative battles before calling a special session of the legislature to take care of unfinished business.

"The state is not in any type of financial crisis," he noted.

He said the Texas legislature, which meets every two years, did take some important steps on insurance issues, resolving funding going forward for the Texas Wind Pool and passing anti-fraud legislation that prohibits attorneys and chiropractors from soliciting business for the first 30 days after an event.

Reacting to the failure of the legislature to fund TDI, the American Insurance Association expressed its dissatisfaction with the situation.

"We are very disappointed that this legislation has fallen victim to partisan politics," Fred C. Bosse, AIA regional vice president, said in a statement. "The TDI Sunset bill deserved full consideration and a final vote."