Texas Department of Insurancewww.tdi.state.tx.us - Consumer Helpline 1-800-252-3439
Texas Department of InsuranceSummaries of the News Releases for 1998 follow. News Release Date:12/22/1998 Insurance Commissioner Elton Bomer today reduced rates for drivers covered through the state's assigned risk plan or Texas Automobile Insurance Plan Association (TAIPA) by an average 27.4 percent. Bomer's order reduces TAIPA rates for bodily injury liability insurance by 41.1 percent. Property damage liability rates will show a slight increase of 2 percent. Combined, TAIPA liability rates will be cut 26.5 percent. Optional coverages that include personal injury protection and uninsured motorist will be reduced by an average of 32.1 percent. "In compliance with state law, I've raised TAIPA's rates significantly over the last three years," Bomer said. "I'm glad that in my last TAIPA order, I'm able again in compliance with state law to lower the rates significantly." The new rates will take effect March 1, 1999. Bomer has resigned effective January 15 to become a senior advisor to Governor George W. Bush. Three of the four parties in the TAIPA rate hearing recommended rate reductions. The Office of Public Insurance Counsel recommended an overall 30.3 percent reduction, TDI staff a 13.3 percent reduction and the Center for Economic Justice a 36.9 percent reduction. TAIPA asked for a 1.6 percent increase. Administrative law judges who heard the case recommended a 26.9 percent rate cut. TAIPA is the state's assigned risk plan for basic auto liability coverages. All rate-regulated auto insurers operating in Texas must participate. Applicants must have been rejected by at least two auto insurers before becoming eligible. About 80,000 Texas drivers currently obtain their liability insurance through TAIPA. Continue News Release Date:12/22/1998 Insurance Commissioner Elton Bomer today reduced rates for drivers covered through the state´s assigned risk plan or Texas Automobile Insurance Plan Association (TAIPA) by an average 27.4 percent. Bomer´s order reduces TAIPA rates for bodily injury liability insurance by 41.1 percent. Property damage liability rates will show a slight increase of 2 percent. Combined, TAIPA liability rates will be cut 26.5 percent. Optional coverages that include personal injury protection and uninsured motorist will be reduced by an average of 32.1 percent. "In compliance with state law, I've raised TAIPA´s rates significantly over the last three years," Bomer said. "I'm glad that in my last TAIPA order, I'm able again in compliance with state law to lower the rates significantly." The new rates will take effect March 1, 1999. Bomer has resigned effective January 15 to become a senior advisor to Governor George W. Bush. Three of the four parties in the TAIPA rate hearing recommended rate reductions. The Office of Public Insurance Counsel recommended an overall 30.3 percent reduction, TDI staff a 13.3 percent reduction and the Center for Economic Justice a 36.9 percent reduction. TAIPA asked for a 1.6 percent increase. Administrative law judges who heard the case recommended a 26.9 percent rate cut. TAIPA is the state´s assigned risk plan for basic auto liability coverages. All rate-regulated auto insurers operating in Texas must participate. Applicants must have been rejected by at least two auto insurers before becoming eligible. About 80,000 Texas drivers currently obtain their liability insurance through TAIPA. Continue News Release Date:12/18/1998 Peter Robert Rollin Jr. of Killeen was arrested this week on charges that he stole $13,250 from his insurance company by claiming his repossessed pickup truck actually had been stolen. The arrest was made in Killeen on Tuesday by investigators for the Texas Department of Insurance's Fraud Unit, assisted by Killeen police officers and an investigator for the Bell County District Attorney. Rollin was charged with theft over $1,500 but less than $20,000, a state jail felony. If convicted he would face a possible maximum sentence of two years in prison and a $10,000 fine. The Fraud Unit's arrest warrant application alleged that Rollin paid for a new Nissan pickup truck with a hot check for $12,000 on October 25, 1997, and drove off in the truck. When the check bounced and Rollin ignored requests to return the truck, the dealership repossessed it. According to the affidavit, Rollin filed a claim with Metropolitan Property and Casualty Insurance Co. and reported that the repossessed truck had been stolen. Metropolitan sent Rollin a $13,250 check for a replacement vehicle. A Bell County District Attorney's Office investigator, Greg Holloway, said he told Rollin that he knew the truck had not been stolen and advised Rollin to return the money to the insurance company. Instead, the arrest warrant alleged, Rollin used $7,000 of the insurance proceeds as a cash down payment to buy another vehicle - from a different dealership. Continue News Release Date:12/15/ 1998 A 30-year-old bookkeeper for the Marlin Democrat has been arrested and charged with arson in a fire that struck the newspaper's office late Sunday. Members of the State Fire Marshal's Office arrested Tracey Bone Monday afternoon on a charge of intentionally setting fire to her office at the Marlin Democrat. Bone was taken to the Falls County Jail and placed under $20,000 bond. The fire occurred around midnight Sunday and was quickly contained by members of the Marlin Fire Department. Bone's office was destroyed, while the rest of the building received heavy heat and smoke damage. State Fire Marshal investigators quickly determined that the fire was intentionally set with an incendiary device. Within 24 hours, Bone was questioned by State Fire Marshal investigators and subsequently arrested. Bone posted bond and was released from custody. The Marlin Democrat publishes a weekly paper to approximately 3,000 subscribers. The newspaper's publisher said despite the fire, his staff would try to get out this week's paper. Marlin is located 30 miles southeast of Waco. Continue News Release Date:12/11/1998 Owners of new coastal homes that meet the state's tougher building code could see rates for windstorm and hail coverage drop by as much as 32 percent. The Texas Department of Insurance (TDI) is proposing discounts of 19 percent to 32 percent on Texas Windstorm Insurance Association hail and wi nd policies covering new coastal area homes built under the new Building Code for Windstorm Resistant Construction. The code has been in effect in the 14 coastal counties and portions of Harris County since September 1. A hearing on the proposed discounts is set for 9 a.m. Thursday, January 21, in Room 100 of the William P. Hobby Jr. State Office Building, 333 Guadalupe, Austin. Discounts would be higher for inland areas of the coastal counties if owners or builders meet even tougher building standards required for structures located closer to the coast. The reductions would not apply to additions or repairs to existing structures, but could be used to reduce rates on certain homes retro-fitted to withstand windborne debris. "The proposed discounts would provide additional incentives for coastal residents and builders to construct safer structures, and that could mean fewer lives lost and less property damage from hurricanes that hit the Texas Coast," said Lyndon Anderson, TDI's Associate Commissioner for Property and Casualty. Based on various engineering studies and estimates of savings under the new code, TDI staff is recommending the following discounts for new residential construction:
The percentage discounts could be modified during the rulemaking process. Some of the discounts are required by House Bill 3383 passed during the 1997 legislative session, while others represent additional incentives proposed by the Department. The bill requires the Commissioner of Insurance to determine the percentage of equitable across-the-board rate reductions within 180 days after implementing the new building code. Continue News Release Date:12/10/1998 LOCAL ANGLE FOR DALLAS, FORT WORTH, HOUSTON, AUSTIN, EL PASO AND LOWER VALLEY (Note to Dallas and Fort Worth media: To obtain names and phone numbers of two Fort Worth drivers who saved money through the MAP, call TDI´s Public Information Office at 512-463-6425.) During its first month in Dallas and Fort Worth, the state´s new car insurance Market Assistance Program (MAP) received 230 calls from drivers in underserved ZIP codes who wanted help in finding lower cost auto liability coverage. One driver´s phone call saved her $900 a year on a policy that includes a young driver. Another consumer is saving $600 a year in auto premiums. Both live in Fort Worth. Consumers can contact the MAP by calling 1-888-799-MAPP (6277). "Many consumers don't know if they are paying too much for car insurance until they call us," said Commissioner Elton Bomer. "One free phone call to the Texas Department of Insurance could result in a very nice Christmas present to yourself." The Department is launching the MAP in four stages. Phase 1 began July 1 in underserved ZIP codes of Austin, El Paso and the Lower Rio Grande Valley. Phase 2 started September 1 in Houston. Dallas-Fort Worth was added on November 2. The MAP will be extended to the rest of the state on January 1, 1999. From November 2 through December 7, the MAP received 230 calls from drivers in the 39 eligible ZIP codes of Dallas and Fort Worth. After verifying their driving records, the Department placed 142 Dallas and Fort Worth drivers on a password-protected Internet site for possible selection by the nine participating insurance companies. The companies issued 48 policy "quotes" -- offers of coverage -- and, through December 7, Dallas-Fort Worth consumers had accepted nine of those offers. Statewide, as of December 7, participating insurance companies had made 537 policy offers, and 70 had been accepted by consumers. The table below summarizes auto MAP activity through December 7 for all areas where the MAP has been phased in.
Bomer created the MAP to address the problem of good drivers paying too much for auto liability insurance because they were placed in nonstandard markets that primarily insure "high risk" drivers at high rates commensurate with their greater probability of having accidents. The MAP is available to drivers who meet the following eligibility requirements:
Voluntarily participating insurers are Allstate, Farmers, GEICO, Nationwide, Progressive, Prudential Property & Casualty, Safeco, Southern Farm Bureau and State Farm. Each has agreed to charge customers obtained through the MAP the same rates as their other standard and preferred car insurance customers. The comp anies may apply their normal underwriting standards in deciding whether to accept MAP applicants as policyholders. These may include driving record, auto insurance claim history and other factors. Dallas ZIP codes whose residents are eligible to participate in the auto MAP are:
Fort Worth ZIP Codes whose residents are eligible for the auto MAP are:
Continue News Release Date:12/8/1998
Who were the major participants in the benchmark auto rate case?
What are the recommendations and final decision on benchmark auto rates?
NOTE: OPIC is the Office of Public Insurance Counsel; Farmers is represented by two of its Texas companies - Texas Farmers Insurance Co. and Mid-Century Insurance Co. of Texas; and TIO, the Texas Insurance Organization, formerly known as TAISO or the Texas Automobile Insurance Service Office, is an association of small- and medium-sized insurers. What are benchmark rates?
Does one benchmark rate exist for the entire state? No. There are hundreds of benchmark rates. They may vary according to:
What are some examples of how the benchmark rate can vary?
Do benchmark rates affect all writers of auto insurance?
Do insurers have to file new rates after a benchmark rate decision?
The table below tracks year-by-year average changes in standard rates (pre-1992) and benchmark rates (1992 and later). Private Passenger Auto Standard/Benchmark Rate Changes*
*NOTE: Benchmark rate changes are expressed as a statewide average. Continue News Release Date:12/8/1998 To download graphics, click on the appropriate link. The graphic (gif format) will appear in your browser window. To save it to your computer, go to your browser's File menu, click on Save As and select the directory where you want to save the file. Finally, click on Save or OK to save the file to your computer's hard drive.
Continue News Release Date:12/8/1998 Rates by Territory Bomer Orders 5.5 Percent Auto Rate Cut Commissioner Elton Bomer today ordered private passenger auto insurance benchmark rate reductions averaging 5.5 percent. Drivers carrying only liability insurance will see even larger benchmark rate cuts averaging 7.8 percent. The new benchmark rates will take effect February 15, 1999. The reduction follows a 5 percent average statewide benchmark rate cut that took effect January 20, 1998. At that time, Bomer urged companies to file even lower rates. Major companies in the personal auto market filed reductions averaging 7 percent. "Insurance company claim payouts continue to lag well behind premium collections because of tort reform, safer cars, less drunken driving and other factors that have reduced accident costs," Bomer said. "We need to close this gap so that consumers don´t pay too much for their car insurance. All the evidence justifies a substantial rate reduction that still should leave the companies a fair profit on their Texas business." Rate changes by type of auto coverage are as follows:
Individual rate changes will vary considerably, depending on the counties where drivers live, their age and gender, how they use their cars, and the makes, models and years of their vehicles. Factors that account for differences in the ages of cars when calculating collision and comprehensive rates were appropriately revised for the first time since 1990. As a result, drivers of older cars will benefit more from the rate changes than owners of newer cars. At a hearing held in April, the Texas Insurance Organization, an industry group, recommended a 5.9 percent increase, the Office of Public Insurance Counsel a 6.5 percent decrease and an outside actuary representing Texas Department of Insurance (TDI) staff a 2.2 percent reduction. Administrative law judges who conducted the hearing recommended reductions averaging 4.0 percent. Insurance companies have 30 days from February 15 to file their own rates. Companies may use their new rates immediately after filing them or delay implementation for as long as 60 days after filing. TDI´s prior approval is not required if a company´s rates fall within a range of 30 percent above or below the benchmark rates. Companies´ rates are subject to TDI challenge, however, if not adequately justified by data. In most cases, individual consumers´ premiums may be changed only when their policies are renewed. The rate changes apply onl y to drivers insured by rate-regulated insurance companies. Approximately 25 percent of the insured vehicles in Texas are covered by county mutual insurers which, by law, are not subject to rate regulation. Bomer left rates for commercial auto insurance unchanged, as recommended by the administrative law judges. (Note to editors and news directors: Graphics illustrating the automobile benchmark rates are available for downloading from the Texas Department of Insurance´s web site, www.tdi.state.tx.us, along with a list of sample rates for each rating territory.) Continue News Release Date:12/8/1998 Effective February 15, 1999
Typical Driver - The "typical driver" used in this comparison is an adult male (25-64) or female (21-64) with no at-fault accidents or major traffic convictions who drives to and from work. First Scenario - Driver purchases the minimum liability coverages required by law - $20,000 bodily injury liability per person, $40,000 bodily injury liability per accident and $15,000 property damage liability. Second Scenario - Driver purchases optional under/uninsured motorist coverage with basic limits, in addition to the minimum liability coverages required by law. Third Scenario - Driver also buys collision and comprehensive coverage, each with a $500 deductible -- currently the most common deductible for these coverages -- on a year-old (1998 model) Ford Taurus sedan. Fourth Scenario - Same as scenario (3) except the car is a 1994 Ford Taurus sedan. Model year 1994 was chosen because it reflects the average age of Texas private passenger autos with collision and comprehensive insurance coverage. Rates for particular individuals and insurance companies will vary, but the chart shows the impact of the changes in the benchmark rates. The rates include the mandatory tort reform reduction percentages. Continue News Release Date:11/28/1998 A multi-state inquiry into alleged mistreatment of consumers by one of the nation's largest sellers of credit insurance ended today with the company's agreement to pay fines totaling $12 million, including an expected $597,580 to Texas. Twenty-four states will share the fine to which American Bankers Insurance Group agreed without admitting a ny violations of state insurance laws. There also will be restitution to consumers in those states. As with all fines against insurance companies and agents, the money for Texas will go into the general revenue fund, which finances major state government programs such as public schools, higher education and criminal justice. American Bankers specializes in underwriting credit insurance plans such as those sold by major department store chains to their credit card customers and others who finance purchases of appliances and other big-ticket items. In 1997, Texans paid $94.1 million in premiums to six of the eight companies in the American Bankers group. Credit insurance pays a debt when circumstances such as death, illness, disability or unemployment make the borrower unable to continue making payments. The multi-state market conduct examination, coordinated by the National Association of Insurance Commissioners, reviewed allegations that American banks charged more than filed or authorized rates, failed to make required refunds to consumers and underpaid claims filed by its customers. Under the consent order, American Bankers must carry out a compliance plan to correct problems identified by the examination. The plan includes an audit of transactions since February 1, 1997, to identify and make restitution to consumers who lost money because of the alleged excessive rates, unpaid refunds and shortfalls in claim payments. It is not known at this time how much restitution should be paid to Texans. American Bankers could be required to pay an additional $3 million in fines if a re-examination a year from now shows it has not fully complied with the consent order. Senior Associate Commissioner Rose Ann Reeser, acting for Commissioner Elton Bomer, signed the consent order with American Bankers on behalf of the state of Texas. Continue News Release Date:11/13/1998 The Texas Department of Insurance (TDI) today approved the merger of Blue Cross and Blue Shield of Texas with Blue Cross Blue Shield of Illinois. Blue Cross Blue Shield of Illinois is the trade name of Health Care Service Corporation, a Mutual Legal Reserve Company. The Illinois corporation, already licensed in Texas as an insurer and a third-party administrator, has administered portions of the Blue Cross and Blue Shield of Texas for two years under a management contract. The two organizations applied for TDI approval of the merger on July 10, 1996. TDI kept the application on hold pending resolution of a lawsuit filed by the Office of the Attorney General (OAG) challenging the legality of the proposed merger. The 345th State District Court in Austin ruled that the merger is not prohibited by the Texas Non-Profit Corporation Act. The OAG did not appeal this decision. Still pending in the courts is the issue of whether Blue Cross and Blue Shield of Texas is a charity and, as such, must contribute $350 million, plus interest, to the state as a consequence of the merger with Blue Cross Blue Shield of Illinois. If it is subsequently determined that this amount is in fact owed the State, it will be paid over a 20 year period. Texas' Insurance Holding Company System Regulatory Act requires TDI to approve mergers and acquisitions unless TDI finds that:
An in-depth review of the proposed merger by TDI's Financial Program staff determined that none of those conditions existed. Jose Montemayor, associate commissioner of the Financial Program, said the merger would result in $20 million in cost savings during its first year and that the merged company would have substantial financial resources. The merged company, a not-for-profit mutual insurer, will continue the current Blue Cross operations in Texas. Headquarters of the Texas operation will remain in Richardson. The order approving the transaction includes a condition that the merged company must obtain TDI's approval if it ever decides to convert to a stockholder-owned company. Continue News Release Date:11/12/1998 What has happened in the benchmark rate process so far?
Who are the parties in the rate case?
Approved average rate changes with recommendations from parties
NOTE: Specific recommendations on benchmark rates were not made by the Ci ty of Houston or Farmers, represented by two of its Texas companies: Texas Farmers Insurance Co. and Mid-Century Insurance Co. OPIC is the Office of Public Insurance Counsel; and TIO is the Texas Insurance Organization, an association of small- and medium-sized insurers. * TIO rate recommendations as amended during the hearing process. What are benchmark rates?
Does one benchmark rate exist for the entire state?
What are some examples of how the benchmark rate can vary?
Is any change in benchmark rates applied uniformly statewide?
Do insurers have to file new rates after a benchmark rate decision?
Homeowners policies cover most risks, including fires, hurricanes, hail, thefts and liability claims. They do not cover losses from rising flood waters, earthquakes or termites.Tenants (renters) policies cover personal property and household items damaged, destroyed or stolen and provides liability protection if someone is injured in your home. Fire coverage/dwelling policies cover losses due to fire and lightning. Extended coverage/dwellings policies cover losses due to smoke, windstorm, hurricane, hail, explosion, aircraft, vehicles, riot and civil commotion. Additional extended coverage policies adds coverage for water, freezing, glass breakage, building collapse, falling objects, vandalism and malicious mischief. All risk insurance covers all risks of physical loss, unless specifically excluded. What is the history of residential property rates?
The table below tracks the year-by-year average of changes in standard rates (pre-1992) and benchmark rates (1992 and later) for all residential property lines.
------Benchmark Rate Law Takes Effect 9/1/91------------------
NOTE: The benchmark rate changes are expressed as a statewide averages and reflect the TDI-approved benchmark changes for all residential property lines, not just homeowners. Property Insurance Rating Territories by County A Anderson...................14 Andrews....................15N Angelina...................14 Aransas.... ................10 Archer.....................19N Armstrong..................20 Atasocosa..................12 Austin.....................13 B Bailey.....................18 Bandera....................12 Bastrop....................13 Baylor.....................19N Bee........................11 Bell.......................13 Bexar......................5 Blanco.....................13 Borden.....................18 Bosque.....................16C Bowie......................17 Brazoria...................10 Brazos.....................13 Brewster...................15C Briscoe....................18 Brooks.....................11 Brown......................16C Burleson...................13 Burnet.....................13 C Caldwell...................13 Calhoun....................10 Callahan...................16N Cameron....................10 Camp.......................17 Carson.....................20 Cass.......................17 Castro.....................18 Chambers...................10 Cherokee...................14 Childress..................18 Clay.......................19N Cochran....................18 Coke.......................15N Coleman....................16N Collin.....................4 Collingsworth..............20 Colorado...................13 Comal......................13 Comanche...................16C Concho.....................16N Cooke......................19C Coryell....................13 Cottle.....................18 Crane......................15N Crockett...................15C Crosby.....................18 Culberson..................15C D Dallam.....................20 Dallas.....................2 Dawson.....................18 Deaf Smith.................20 Delta.. ....................17 Denton.....................4 Dewitt.....................13 Dickens....................18 Dimmit.....................12 Donley.....................20 Duval......................12 E Eastland...................16C Ector......................15N Edwards....................12 Ellis......................14 El Paso....................7 Erath......................16C F Falls......................13 Fannin.....................17 Fayette....................13 Fisher.....................18 Floyd......................18 Foard......................19N Fort Bend..................11 Franklin...................17 Freestone..................14 Frio.......................12 G Gaines.....................18 Galveston..................8 Garza......................18 Gillespie..................13 Glasscock..................15N Goliad.....................11 Gonzales...................13 Gray.......................20 Grayson....................17 Gregg......................14 Grimes.....................14 Guadalupe..................13 H Hale.......................18 Hall.......................18 Hamilton...................16C Hansford...................20 Hardeman...................19N Hardin.....................11 Harris.....................1 Harrison...................17 Hartley....................20 Haskell....................19N Hays.......................13 Hemphill...................20 Henderson..................14 Hidalgo....................11 Hill.......................16C Hockley....................18 Hood.......................16C Hopkins....................17 Houston....................14 Howard.....................15N Hudspeth...................15C Hunt.......................17 Hutchinson.................20 I Irion......................15N J Jack.......................19C Jackson....................11 Jasper.....................14 Jeff Davis.................15C Jefferson..................10 Jim Hogg...................12 Jim Wells..................11 Johnson....................16C Jones......................19N K Karnes.....................13 Kaufman....................17 Kendall....................13 Kenedy.....................10 Kent.......................18 Kerr.......................12 Kimble.....................16C King.......................18 Kinney.....................12 Kleberg....................10 Knox.......................19N L Lamar......................17 Lamb.......................18 Lampasas...................13 La Salle...................12 Lavaca.....................13 Lee........................13 Leon.......................14 Liberty....................11 Limestone..................14 Lipscomb...................20 Live Oak...................11 Llano......................13 Loving.....................15C Lubbock....................18 Lynn.......................18 M McCulloch..................16C McLennan...................16C McMullen...................12 Madison....................14 Marion.....................17 Martin.....................15N Mason......................16C Matagorda..................10 Maverick...................12 Medina.....................12 Menard.....................16C Midland....................15N Milam......................13 Mills......................16C Mitchell...................15N Montague...................19C Montgomery.................14 Moore..... .................20 Morris.....................17 Motley.....................18 N Nacogdoches................14 Navarro....................14 Newton.....................14 Nolan......................15N Nueces.....................9 Continue News Release Date:11/12/1998 Rate Changes by Territorial Zone Insurance Commissioner Elton Bomer today cut homeowners insurance benchmark rates by a statewide average of 6 percent. Benchmark rates vary among Texas´s 23 rating territories, but the largest reductions occurred in the southern half of the state. The new benchmark rates will take effect February 1, 1999. Companies then must file their new rates within 30 days. The benchmark rate decision will affect only rate-regulated companies, which, as of the end of 1997, represented about 20 percent of the p remium dollars of the residential property insurance market. Rate-regulated companies set their own rates within a 30 percent range above or below benchmark. Lloyds companies and reciprocal exchanges, which account for about 80 percent of the homeowners market, write at unregulated rates and are unaffected by the benchmark. Bomer cited reduced claims compared to premiums as one reason for the benchmark rate reduction. "Our violent weather patterns appear to have simmered down, and that´s helped lower homeowners benchmark rates," Bomer said. "We can be thankful that we have dodged hurricanes for the past decade and other catastrophic windstorms in recent years." The new benchmark rate for homeowners along the Gulf coast will be reduced by 12.6 percent. Residents of the Central-South Zone will see a benchmark reduction of 13.3 percent. Residents of the Central-North and North-Northwest zones will see benchmark rate increases of 1.4 and 3.2 percent, respectively. The actual changes will vary by rating territory within each zone. The insurance industry requested a 4.8 percent statewide average increase in homeowner benchmark rates, while administrative law judges for the State Office of Administrative Hearings recommended a 5 percent reduction and the Office of Public Insurance Counsel asked for an 8.1 percent reduction. In other lines of property coverage Bomer closely followed administrative law judges´ recommendations. Bomer ordered a 2 percent statewide increase in renter´s insurance, following three years of substantial reductions. The benchmark rate for dwelling fire was increased an average of 10.3 percent statewide, while dwelling extended coverage benchmarks were cut 5.6 percent. Dwelling fire policies cover homes and their contents against losses due to fire and lightning. Extended coverage adds protection against certain non-fire losses, such as wind and hail damage. Unlike homeowners, dwelling policies don´t provide liability or medical payments coverage. Continue News Release Date:11/12/1998
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Continue News Release Date:11/10/1998 Insurance Commissioner Elton Bomer today signed an order adopting a formal appointment process for licensed professional engineers to serve as qualified windstorm inspectors. Professional engineers currently inspect nearly 80 percent of all new structures along the Texas coast. The approval of this new process will now provide enhanced regulatory supervision. Bomer's order will hold engineers accountable for their inspections to ensure that structures meet windstorm building code requirements. Bomer's action specifies the requirements for engineers to inspect new and remodeled residential homes and buildings and notify TDI of their compliance to make them eligible for windstorm and hail insurance through the Texas Windstorm Insurance Association (TWIA). Under the new rule, engineers wanting to continue to inspect structures for compliance for windstorm coverage must apply with the Texas Department of Insurance by filling out a simple two-page form. No fee is required. Bomer said engineers who sign up will be held responsible for their inspections. "By registering engineers to serve as inspectors, TDI will maintain some oversight in seeing that windstorm inspections are done right," Bomer said. "This also clearly outlines the authority available to the Department to take action if inspections fail to meet applicable code requirements." A notice with an engineer application form will soon be sent to all engineers who are currently on TDI's mailing list. Engineers who do not receive this notice can contact TDI at 512-305-7607. Each application will be screened to verify an applicant's education, training and experience in the design of structures in high wind areas. After February 1, 1999, all engineers must be approved and appointed by TDI if they wish to continue inspecting structures for compliance for windstorm coverage. Licensed professional engineers who qualify as inspectors can design, inspect and prepare plans and calculations for each building and structure in accordance with wind load requirements of construction standards. Bomer's order also calls for random periodic audits of buildings or structures and provides sanctions for non-compliance. TDI has seven windstorm inspection field offices along the Texas coast. The Department's inspectors will continue to inspect structures to ensure compliance with the Windstorm Resistant Construction Guide and the new building code. Continue News Release Date:10/30/1998 LOCAL ANGLE FOR DALLAS, FORT WORTH, HOUSTON, AUSTIN, EL PASO AND LOWER RIO GRANDE VALLEY Starting Monday, good drivers in 39 underserved ZIP codes in Dallas and Fort Worth can get help in finding lower-cost car insurance by calling a toll-free number at the Texas Department of Insurance (TDI). Dialing 1-888-799-MAPP is all it takes to hook up with TDI´s automobile insurance Market Assistance Program (MAP), which uses the Internet to send eligible drivers' applications to participating insurance companies. Dallas ZIP codes whose residents are eligible to participate in the auto MAP are:
Fort Worth ZIP Codes whose residents are eligible for the auto MAP are:
TDI is launching the MAP in four phases. It started July 1 in Austin, El Paso and the Rio Grande Valley. Houston was added on September 1. The MAP reaches out to Dallas and Fort Worth on Monday, November 2. Underserved ZIP codes in the remainder of the state will join the MAP on January 1, 1999. Ultimately, the program will be available to consumers in 383 underserved ZIP Codes throughout Texas. Commissioner Elton Bomer started the program to help good drivers who, for whatever reason, became insured by the state´s assigned risk plan or by county mutual insurers. County mutuals specialize in covering problem drivers at unregulated - and usually higher - rates. "Drivers should pay the rates they've earned. Something is out of kilter when good drivers pay bad driver rates for their car insurance," Bomer said. "The MAP is a Texas-style approach that encourages insurance companies to voluntarily cover these misplaced drivers at rates that match their driving records." Applications from eligible drivers go to nine insurance company groups that write about two-thirds of the car insurance sold in Texas. They are Allstate, Farmers, GEICO, Nationwide, Progressive, Prudential Property & Casualty, Safeco, Southern Farm Bureau and State Farm. Each insurer is participating voluntarily and has agreed to charge customers obtained through the MAP the same rates as its other standard and preferred car insurance customers. The MAP is available to drivers who meet the following eligibility requirements, even if they already have car insurance:
Toll free calls are answered by employees in TDI´s MAP Section. This section also operates the Department´s Market Assistance Program for residential property insurance. A MAP staff member asks for the caller´s ZIP code and the driving record of the caller and any family members living in his or her household. If the answers indicate possible eligibility, the MAP staffer then offers to take the caller´s application. The application includes the driver´s license number, address, phone number, birth date, gender, year, make and model of vehicle and current auto insurance carrier. If other drivers are in the household, the application also includes their names and drivers' license numbers or birth dates. The MAP section asks the Texas Department of Public Safety for each driver´s MVR for the preceding three years. Only applications in which all drivers to be covered have MVRs free of tickets for moving violations and at-fault accidents are deemed eligible and forwarded to insurance companies. Participating insurers download eligible applications from a password-protected Internet site. A company may apply its normal underwriting standards in deciding whether to accept a MAP applicant as a policyholder. Companies also may obtain information from other sources besides a driver´s MVR for use in deciding whether to offer coverage. This additional information usually includes a person´s auto insurance claim history. Although the MAP is designed to help consumers find less expensive auto liability policies, insurers may offer additional coverages, such as collision and comprehensive, at preferred or standard rates. Some drivers already have cut their auto insurance premiums by hundreds of dollars a year by calling the MAP. A Houston man, for example, cut his premium by $240 a year. Statistics for the period July 1 - October 29 appear in the table below
*A caller´s application is not placed on the Internet if a Motor Vehicle Records check discloses any tickets for moving violations or at-fault accidents. **The totals include some drivers offered policies by more than one carrier. Continue News Release Date:10/28/1998 Five two-member teams of insurance specialists from the Texas Department of Insurance (TDI) were sent today to South Texas cities hit hard by recent floods. TDI employees will operate in the Federal Emergency Management Agency's disaster recovery centers in San Antonio, New Braunfels, Victoria, Wharton and Cuero. Teams enroute to San Antonio, Victoria and Cuero will include at least one bi-lingual technician. "These teams will provide information to flood victims and assist them with their insurance needs," Insurance Commissioner Elton Bomer said. "If they can expedite the work of adjusters or simply help contact insurance companies with potential claims, they'll do it." President Clinton declared 25 South Texas counties a major disaster following floods that began October 17 and killed 29 people. Homeowners insurance does not cover damage due to floodwaters, but flood insurance can be obtained from the National Flood Insurance Program. Residents who have comprehensive coverage on their cars and mobileowners with standard insurance policies have coverage from floodwater damage. TDI technicians will work out of the disaster recovery centers in:
Continue News Release Date:10/19/1998 Insurance Commissioner Elton Bomer today offered the following tips to Texans filing insurance claims for damage to their homes, cars and businesses following the severe weather. Contact your insurance company or agent as soon as possible. To speed claims handling, provide the policy number from the first page of your policy. If your policy was lost in the storm, your agent can look up the information you need. Be aware that flood damage is covered by automobile "comprehensive" coverage and by most mobilowners (mobile home) policies but not by homeowners and renters policies. Homeowners and renters policies do cover damage from rain that enters through an opening such as window or leaking roof. Make temporary repairs if necessary to protect your property from further damage. Do NOT make permanent repairs until an adjuster has inspected the damage. Your policy covers the cost of necessary temporary repairs, so save your receipts for materials and labor. If you can't remain in your home because of damage covered by a homeowners or renters policy, the policy will pay for staying in a hotel, motel or other temporary shelter. If the damage does force you to move, be sure to tell your insurer where you are and how to reach you by phone. Also, leave a note at your damaged residence telling the insurance adjuster how to find you. You probably do NOT need the services of a "public adjuster." If you hire a public adjuster to help with your claim, be sure you understand his or her fee arrangements. Public adjusters usually charge a percentage of your total claim payment. Be aware that an insurance company cannot discontinue your homeowners or auto policy because of weather-related claims. If you feel an insurance company is treating you unfairly, or if you need additional information, call the Consumer Protection Program of the Texas Department of Insurance, 1-800-252-3439. Continue News Release Date:10/9/1998 LOCAL ANGLE FOR HOUSTON, AUSTIN, EL PASO AND LOWER VALLEY During its first month in Houston, the state´s new car insurance Market Assistance Program received 287 calls from drivers in underserved ZIP codes who wanted help in finding lower cost auto liability coverage. Consumers can contact the MAP by calling 1-888-799-MAPP (6277). The Texas Department of Insurance (TDI) is launching the MAP in four stages. Phase 1 began July 1 in underserved ZIP codes of Austin, El Paso and the Lower Rio Grande Valley. Phase 2 started September 1 with the addition of 57 underserved ZIP codes in Houston. Dallas-Fort Worth will be added on November 1 and the rest of the state on January 1, 1999. From September 1 through September 30, the MAP received 287 calls from drivers in the 57 eligible ZIP codes of Houston. Staff also processed applications from 70 Houston drivers who called before Houston was officially phased in on September 1. After screening their driving records, the Texas Department of Insurance (TDI) placed 165 Houston drivers ' applications on a password-protected Internet site for possible selection by the nine participating insurance companies. Additional applications are placed on the Internet as the Texas Department of Public Safety verifies that the drivers' motor vehicle records (MVR) meet MAP eligibility requirements. As of the close of business on September 30, participating insurance companies had offered policies to 191 drivers, including 22 in Houston. The table below summarizes auto MAP activity through September 30 for all areas where the MAP has been phased in.
Commissioner Elton Bomer sent letters this week to all participating companies, expressing concern about the small number of policies written through September 30. "I expect participating companies to contact every Auto MAP applicant and I expect a far greater number of these applicants to be written through the Auto MAP," Bomer said. Bomer created the MAP to address the problem of good drivers paying too much for auto liability insurance because they were placed in nonstandard markets that primarily insure "high risk" drivers at high rates commensurate with their greater probability of having accidents. "The market doesn't work as well as it should when good drivers pay bad driver rates," Bomer said. "The auto MAP is an opportunity for good drivers to get the rates they deserve and for insurance companies to prove they want to be part of the solution rather than part of the problem." The MAP is available to drivers who meet the following eligibility requirements:
Voluntarily participating insurers are Allstate, Farmers, GEICO, Nationwide, Progressive, Prudential Property & Casualty, Safeco, Southern Farm Bureau and State Farm. Each has agreed to charge customers obtained through the MAP the same rates as their other standard and preferred car insurance customers. The companies may apply their normal underwriting standards in deciding whether to accept MAP applicants as policyholders. These may include driving record, auto insurance claim history and other factors. Continue News Release Date:10/9/1998 NOTE: Hole In One International corrected its licensing problems and won approval to do business in Texas on November 13, 1998. October 9, 1998 A Reno, Nevada, corporation agreed today to pay a $25,000 fine for selling coverage for hole-in-one golf competitions without a Texas insurance license. In a consent order signed by Insurance Commissioner Elton Bomer, Hole-In-One International Inc. voluntarily ceased operating in Texas. The order said the company conceded that its cond uct was contrary to Texas law but contended that it was permissible under Nevada law. The order said that since 1992 the company or its representatives solicited and accepted at least 949 applications from sponsoring groups for insurance that would pay the prize money to winners of hole-in-one contests. The company's fees included at least $309,950 in insurance premiums. In this type of arrangement, a group - often a charity - holds a contest offering big prizes to people who pay to attempt difficult feats of skill, such as a hole-in-one in golf or a basket made at a great distance on a basketball court. The Texas Department of Insurance maintains that only authorized insurers, through duly licensed agents, may offer to cover the payment if an attempt is successful. The prohibition against Hole-In-One International operating in Texas will remain in effect unless and until the company obtains a certificate of authority to act as an insurer under the Texas Insurance Code. The company is not prohibited from honoring any contract signed prior to the approval of the consent order. Continue News Release Date:10/8/1998 Attention: Minority Business Press The Texas Department of Insurance (TDI) is hosting its 5th annual "Business Opportunities Fair" on Wednesday, October 21, 1998. The fair will take place from 9 a.m. to noon in Room 100 of the William P. Hobby State Office Building, 333 Guadalupe, Austin. The purpose of the fair is to locate historically underutilized businesses (HUBs) that can meet TDI's procurement needs in the areas of printing, computer-related purchases and professi onal services such as accounting, business analysis, claims and legal services. Qualified HUB vendors include businesses owned by minorities and women. The program will include information on the state's bid process and TDI's purchasing needs. The fair will give businesses, especially HUBs, a chance to network with purchasing agents from TDI and several other state agencies, as well as network with other vendors. For more information, e-mail Anna Lisa Montoya at annalisamontoyatdi.state.tx.us or call Regina Durden at (512) 322-4185. The Texas Department of Insurance (TDI) is looking for printing and information services vendors, especially historically underutilized businesses (HUBs), as well as firms providing various professional services. To help recruit the new vendors, TDI is sponsoring a "Business Opportunities Fair" on Thursday, March 26. The fair runs from 9:30 a.m. to noon in Room 100 of the William P. Hobby State Office Building, 333 Guadalupe, in Austin. The program includes information on the state's bid process and TDI's purchasing needs. In addition, staff will announce upcoming bid opportunities and provide additional information on the HUB vendor program. Qualified HUB vendors include businesses owned by minorities and women. For more information, e-mail consumerprotectiontdi.state.tx.us or call Regina Durden at 512-463-6174. Register for the fair on-line at TDI's web site (www.tdi.state.tx.us/consumer/hub.html). Continue News Release Date:10/2/1998 Insurance Commissioner Elton Bomer today authorized additional cuts to various lines of liability insurance rates that will push t otal tort reform savings since 1996 to more than $2.2 billion. The projected savings for 1999 are estimated at $697.9 million dollars, surpassing last year´s savings of $656.4 million. As a result of the order, benchmark rates for private passenger automobile bodily injury (BI) liability insurance will be 9.2 percent lower in 1999 than they would be without tort reform. Tort reform savings for individual automobile policyholders will total an estimated $247.4 million in 1999 -- 35 percent of the total savings for all affected lines of liability insurance. "Pure and simple, tort reform legislation has created a tremendous savings for Texans," Bomer said. "Four years of tort reform will mean that more than $2 billion has stayed in the hands of Texas policyholders." The rate reductions ordered today take effect January 1, 1999. This is the fourth year that Bomer has implemented annual rate reductions in the program´s five-year plan. Savings from general liability, which provides coverage for businesses, will increase to $203.3 million. Significant increases in savings also will occur in commercial auto, products liability and medical malpractice. The Texas Legislature ordered the insurance commissioner to reduce liability insurance rates to reflect the savings insurers would realize from tort reform beginning January 1, 1996. The legislation has been effective in reducing the number of lawsuits and creating more reasonable insurance settlements. "Tort reform has changed the behavior patterns of the legal profession and insurers," Bomer said. "Fewer frivolous lawsuits and multi-million dollars judgements, along with tougher claims handling practices have clearly benefited both insurers and consumers." Savings from tort reform rate reductions ordered by Bomer for years 1996-1999 are summarized in the table below:1/1/99 Tort Reform Rate Adjustment Projected Savingsby Line of Insurance based on Proposed Decision
*Differences in savings are a result of change in premium volume by line of insurance.
Public hearings for 1999 tort reform rate reductions were held August 25 and September 23. Continue News Release Date:10/1/1998 At 6 p.m. Wednesday, October 7, fire departments across Texas will sound alarms signaling the need for families to practice their escape plans in case of a fire. It's part of a nationwide effort during Fire Prevention Week, which has the theme this year of "Fire Drills: The Great Escape!" "So often, fire drills are practiced at school and at work, but not at home," said G. Mike Davis, Texas State Fire Marshal. "The lives of many children would be saved if families practiced an escape plan at home." Davis said every family member should have two different escape routes from each bedroom of their home. While one would be the closest door to the outside, another escape route may be a nearby window that can be opened. "This Wednesday, when fire alarms start sounding all over town, would be an excellent time for families to practice an escape plan or at least discuss what they should do in the event of a fire," Davis said. An adequate escape plan includes checking smoke alarms. Families also should map out the home's floor plan to show the best escape routes. Parents should designate an outdoor location for family members to meet once they've escaped. Calling the fire department or 911 from a neighbor's house also should be included with every escape plan. In 1996, house fires claimed the lives of 183 people in Texas, 41 of them children und er the age of 14. Davis said a well-executed escape plan by all families can reduce those numbers substantially. ### Note: For a picture of Governor George W. Bush signing a state proclamation designating October 4 - 10, 1998 as Fire Prevention Week, use the Texas Department of Insurance Web site at www.tdi.state.tx.us or contact TDI's Public Information Office at 512-463-6425. Continue News Release Date:9/3/1998 Commissioner Elton Bomer today adopted a citizen advisory committee´s recommended changes in the state´s new coastal Building Code for Windstorm Resistant Construction on an emergency basis so builders can begin using them immediately. Non-engineered structures (including additions and certain repairs) started on or after September 1 must meet the new code to qualify for wind and hail coverage by the Texas Windstorm Insurance Association (TWIA). The changes adopted today were recommended by the state´s Building Code Advisory Committee in response to builders´ suggestions at Texas Department of Insurance educational seminars on the code in coastal cities. The revised building code is available at TDI´s Internet web site, www.tdi.state.tx.us. Paper copies are being mailed to builders and their trade associations along the coast. Without emergency action by Bomer, the changes probably would be 60 to 90 days in the future because of state notice and hearing requirements and other considerations. Bomer plans to follow those requirements and consider permanent adopti on of the building code changes in the near future. The building code changes put into effect today include provisions that would:
New homes built to the new code will qualify for TWIA wind and hail insurance premium discounts, to be determined by Bomer in the near future. Continue News Release Date:8/31/1998 LOCAL ANGLE FOR HOUSTON, AUSTIN, EL PASO AND LOWER RIO GRANDE VALLEY Beginning Tuesday, good drivers in 57 underserved ZIP codes in Houston can find help in reducing their insurance rates by calling 1-888-799-MAPP, toll-free. Phase Two of the Texas Department of Insurance´s automobile liability insurance Market Assistance Program (MAP) starts Tuesday with the addition of Houston. Phase One began July 1 in Austin, El Paso and the Lower Rio Grande Valley. Dallas-Fort Worth ZIPs will be added November 1. When the phase-in concludes on January 1, 1999, the program will be available to consumers in almost 400 underserved ZIP Codes throughout Texas. Commissioner Elton Bomer started the program to help good drivers who, for whatever reason, became insured by "non-standard" insurers or through the state´s assigned risk plan, both designed mainly for high-risk drivers. "The car insurance market works as it should when consumers pay the rates they've earned," Bomer said. "But something needs fixing when good drivers pay bad-driver rates. The auto insurance MAP is a Texas-style approach that encourages insurance companies to cover these misplaced drivers at rates that match their records." Some Austin, El Paso and Lower Rio Grande Valley drivers who called the MAP for assistance cut their car insurance premiums by literally hundreds of dollars a year. "Now it´s Houston´s turn to get in on the savings," Bomer said. The program remains available also to Austin, El Paso and Lower Valley drivers. Statistics on calls and eligible applications from underserved ZIP codes in each of those three areas for the period July 1 - August 28 appear in the table below.
*Based on incomplete data reported by seven of nine participating insurers. Actual count may be greater. Applications from eligible drivers go to nine insurance company groups that agreed to participate voluntarily in the MAP. The groups are Allstate, Farmers, GEICO, Nationwide, Progressive, Prudential Property & Casualty, Safeco, Southern Farm Bureau and State Farm. Together, they write about two-thirds of the car insurance sold in Texas. Each insurer has agreed to charge customers obtained through the MAP the same rates as their other standard and preferred car insurance customers. The MAP is available to drivers who meet the following eligibility requirements, even if they already have car insurance:
Toll free calls are answered by employees in TDI´s MAP Section, which also operates the Department´s market assistance program for residential property insurance. A MAP staff member asks for the caller´s ZIP code and the driving record of the caller and any family members living in his or her household. If the answers indicate possible eligibility, the MAP staffer then offers to take the caller´s application. The application, or Consumer Profile, includes the driver´s license number, address, phone number, birth date, gender, year, make and model of vehicle and current auto insurance carrier. If other drivers are in the household, the Customer Profile will include their names and drivers' license numbers or birth dates. The MAP section asks the Texas Department of Public Safety for each driver´s Motor Vehicle Record (MVR) for the preceding three years. Only applications in which all drivers to be covered have clean MVRs are deemed eligible and forwarded to insurance companies. Participating insurers download eligible applications from a password-protected Internet site. A company may apply its normal underwriting standards in deciding whether to accept a MAP applicant as a policyholder. Companies also are free to obtain information from other sources besides a driver´s MVR for use in deciding whether to offer coverage. This additional information usually includes a person´s auto insurance claim history. Although the MAP is designed to help consumers find less expensive auto liability policies, insurers may offer additional coverages, such as collision and comprehensive, at preferred or standard rates. TDI will develop statistics on the auto MAP´s results. When a company offers a policy to an applicant, it must report the coverage and the premium. When an insurer rejects an application, it must report the reasons. Houston ZIP codes whose residents are eligible to participate in the auto MAP are:
Continue News Release Date:8/28/1998 Commissioner Elton Bomer today scheduled a Thursday (September 3) hearing for emergency adoption of changes to the state's new coastal Building Code for Windstorm Resistant Construction that were recommended by a citizen advisory committee. The hearing will be at 10 a.m. in Room 102 of the William P. Hobby Jr. State Office Building, 333 Guadalupe, Austin. Once adopted, the changes can be used immediately by coastal builders who choose to follow the code's construction requirements for non-engineered buildings. Non-engineered structures started on or after September 1 must meet the new code to be eligible for wind and hail coverage by the Texas Windstorm Insurance Association (TWIA). The advisory committee and Texas Department of Insurance (TDI) staff developed numerous proposed changes in response to builders' suggestions at TDI educational seminars on the code in coastal cities. Without emergency action by Bomer, the changes probably would be 60 to 90 days in the future because of state notice and hearing requirements and other considerations. Bomer plans to issue proposed rules for public comment and hold a public hearing in the near future to consider permanent adoption of the building code changes. Emergency rules may stay in force no longer than 120 days, plus a possible 60-day extension for a total of 180 days. Bomer is acting under provisions of state law allowing agencies to adopt rules on an emergency basis when there is "imminent peril" to health, safety or welfare. "Unless I act now, builders, architects and prospective home buyers will be in limbo for more than two months - which will take us nearly to the end of hurricane season," Bomer said. "If a hurricane does strike, rebuilding and repairing will need to comply with the code provisions in effect at the time. Adopting the changes now will avert considerable harm to the ec onomic welfare of coastal homebuyers and builders by eliminating uncertainty about how and when to build." Among the changes recommended by the citizen advisory committee are those that would:
Bomer adopted the new code in June 1997, with a June 1, 1998, effective date to allow a one-year period for the construction industry to prepare for its use. During that time TDI conducted more than a dozen seminars for builders, architects and engineers. Bomer extended the effective date to September 1 after builders complained in late May that some materials necessary to build homes to the new code were not yet available. The necessary materials are now available. The new standards for wind-resistant construction are based on current technology and reflect lessons learned from Hurricane Andrew in 1992. The standards replace those established in the early 1970s, based on the technology of that era. The code is important to coastal builders and consumers because of its connection to eligibility for TWIA coverage. TWIA is the state's in surer of last resort for wind and hail coverage in the 14 coastal counties and part of Harris County on Galveston Bay. As such, TWIA provides wind and hail coverage when insurance companies exclude it from homeowners and other property policies sold to coastal residents. Non-engineered structures, including additions and repairs, qualify for TWIA coverage only if:
New homes built to the new code will qualify for TWIA wind and hail insurance premium discounts, to be determined by Bomer in the near future. Continue News Release Date:8/27/1998 The Texas Windstorm Insurance Association (TWIA) today adopted an interim policy of paying wind and hail claim amounts that include any additional cost of complying with the new Building Code for Windstorm-Resistant Construction that takes effect September 1. TWIA approved the interim policy in response to requests from Insurance Commissioner Elton Bomer and coastal legislators. "I'm pleased that TWIA acted quickly to alleviate a possible economic hardship for some of its policyholders if a hurricane strikes the Texas coast during the next few months," Bomer said. The policy will remain in place until Bomer acts on a proposed TWIA wind and hail policy add-on ("endorsement") that would cover the added repair costs to bring a damaged home up to the new standards. Policyholders who want the extra "repair to code" coverage then could buy the endorsement for an additional premium. Because of state notice and hearing requirements, and other considerations, it probably will be two to three months before TWIA can offer the optional endorsement. Hurricane season officially ends on November 30. Most property insurance policies, including those issued by the TWIA, do not cover the added cost of conforming a structure to building code changes enacted since it was built. TWIA is the state's insurer of last resort for wind and hail coverage in the 14 coastal counties and part of Harris County on Gal veston Bay. As such, TWIA provides wind and hail coverage when insurance companies exclude it from homeowners and other property policies sold to coastal residents. Non-engineered structures, including additions and repairs, qualify for TWIA coverage only if:
Bomer adopted the new code in May 1997, concluding five years of studies, public meetings and drafting that involved a citizen advisory committee, Texas Tech University and Texas A&M University. The original effective date was June 1, 1998, but Bomer extended it to September 1 after builders complained that some materials necessary to build homes to the new code were not yet available. Building products meeting the new standards are now available to the builders. TDI regularly issues lists of acceptable building products to more than 700 individual builders along the coast and to their local associations. For example, more than a dozen door products and a dozen window products meet the highest standard for impact resistance. The new standards for wind-resistant construction are based on current technology and reflect lessons learned from Hurricane Andrew in 1992. The standards replace those established in the early 1970s, based on the technology of that era. The code is subject to continuous review and may be changed whenever necessary. The citizens advisory committee recently recommended several changes to Bomer, who will consider them for adoption. The changes include exemption of historical structures from the new standards and an increase in permissible roof spans from 36 feet to 48 feet. A Texas A&M cost-benefit study determined that the new standards would reduce hurricane losses by about 50 percent while adding 2 percent to 5 percent to the cost of new homes. The 1997 Legislature guaranteed that owners of homes built to the new standards and insured by TWIA will automatically save money on their premiums. Legislators enacted a law requiring Bomer to prescribe the amount of premium discounts within 180 days after the new code's effective date. If the Commissioner does not act within that time, the discount automatically would become 6 percent. "I'm not going to wait 180 days," Bomer said. "I plan to issue rules requiring the discount as quickly as possib le so that TWIA policyholders can see an immediate benefit from the new code." Continue News Release Date:8/20/1998 Insurance Commissioner Elton Bomer will hold a public hearing Thursday, September 24, to gather information on how best to enforce Texas law that prohibits managed care organizations from offering financial incentives to physicians or providers that result in limiting medically necessary services. Bomer is seeking comments to help the Department develop guidelines for compliance with recent legislation enacted to prohibit improper financial incentives. "The information we hope to gain from this hearing should help us understand what are appropriate physician financial incentives," Commissioner Bomer said. I want all interested parties to be on the same page when we issue guidelines. TDI hopes to focus comments on several areas that include: whether risk is spread sufficiently; determination of targets; incentives which limit access within network; evidence of under-utilization and access problems; amount of risk placed on physicians; and quality incentives. The hearing begins at 9 a.m. in Room 101, Building 200, at the Texas Department of Transportation, 200 E. Riverside. The main hearing room at the Texas Department of Insurance is under repair. Continue News Release Date:8/19/1998 Commissioner Elton Bomer signed a consent order Tuesday fining Harris Methodist Texas Health Plan $100,000 for allegedly using financial incentives that directly or indirectly encourage doctors to limit medically necessary services. Harris Methodist, which serves 310,000 members in 37 North and Northeast Texas counties, also agreed to refund about $3.4 million in physician penalties and lost bonuses and to rewrite its physician contracts within 150 days. The order concluded a Texas Department of Insurance enforcement case over an incentive plan that provided doctors with bonuses if they kept certain pharmacy costs below budget and penalized them if costs went over budget. "With this order, we make the rules of the game very clear - certain financial incentives that can limit medically necessary services will not be allowed in Texas," Bomer said. "Additional staff review of industrywide practices show that Harris may not be the only HMO with these kind of improper incentives. We will soon be issuing proposed guidelines in this area, and action against additional HMOs may be required." Under the agreement, Harris Methodist did not admit any wrongdoing or violation of Texas insurance laws. However, the HMO agreed to:
An original recommendation by TDI staff that Harris pay an $800,000 administrative penalty was lowered to $100,000, in part, because of the HMO's efforts to resolve the matter without additional cost to the state and its willingness to repay physicians for lost pay and bonuses. TDI staff attorneys reached the accord after months of negotiation with Harris Methodist officials. Harris serves Bosque, Collin, Comanche, Cooke, Coryell, Dallas, Delta, Denton, Eastland, Ellis, Erath, Falls, Fannin, Franklin, Freestone, Grayson, Hamilton, Hill, Hood, Hopkins, Hunt, Jack, Johnson, Kaufman, Lamar, Limestone, McLennan, Montague, Navarro, Palo Pinto, Parker, Rains, Rockwall, Somervell, Tarrant, Wise and Wood counties. Continue News Release Date:8/14/1998 The Texas Department of Insurance (TDI) is requiring all companies selling homeowners insurance in Texas to report any denial of claims for foundation damage caused by plumbing leaks over a four-year period. Deputy Insurance Commissioner David Durden issued a bulletin today setting a September 7 deadline for companies to provide information on denials from August 1993 through August 1997. The bulletin also seeks information on any foundation claims for which the cause was not investigated or determined during the same period, plus reports on actions planned or taken toward resolving all claims included under the bulletin. "We want to make sure that each insurance company has a plan to adjust these claims in light of the recent Supreme Court decision," Commissioner Elton Bomer said. "After the information is received, the Department will determine whether any further action is required." On July 3, 1998, the Texas Supreme Court held that the standard homeowners' policy Form HO-B covers foundation damage from slab movement caused by plumbing leaks. This settled a long-running legal dispute between insurance companies and some homeowners seeking damages from slab movement caused by leaks. TDI consistently argued that standard HO-B policies cover this type of damage. Despite a federal appeals court ruling in favor of insurers, Bomer issued a bulletin on August 22, 1997, requiring insurers to pay these claims. The appeals court then referred the matter to the Texas Supreme Court for a final decision. The court's ruling does not affect claims for damage caused by shifting soil unrelated to plumbing leaks. Homeowners policies do not cover this type of damage. Continue News Release Date:8/6/1998 LOCAL ANGLE FOR AUSTIN, EL PASO AND LOWER VALLEY For assistance in developing local angle, call 512-463-6425. Almost 600 drivers in eligible underserved areas called on the state´s new car insurance Market Assistance Program in its first month of operation to get help in finding lower-cost auto liability coverage. After screening their driving records, the Texas Department of Insurance (TDI) placed 354 drivers' applications on a password-protected Internet site for possible selection by the nine participating insurance companies. Consumers can contact the MAP by calling 1-888-799-MAPP (6277). Preliminary reports indicate that companies are offering coverage to MAP applicants. State Farm, for example, reported that during July it contacted 284 applicants, received responses from 119 and offered policies to 48. Allstate said it had contacted 98 applicants, received responses from 55 and offered coverage to 30 applicants. Progressive reported that during the first two weeks of July it contacted 63 applicants, received responses from 35 and offered policies to 11. An Austin woman told TDI´s MAP staff that she cut her monthly premium from $145 to $77 for a full-coverage package (liability plus physical damage insurance) by changing to a company that made her an offer after selecting her application from the Internet. "The MAP is an exciting opportunity for good drivers in underserved areas to find car insurance at rates that reflect their driving records," said Commissioner Elton Bomer. "The first month´s numbers indicate that Texas consumers welcome such a service. I look forward to an increasing number of drivers actually saving money through this program." TDI is phasing in the auto MAP over a six-month period. It started in Austin, El Paso and the Lower Rio Grande Vall ey on July 1. The following table shows each area´s statistics for the month of July on calls received from eligible ZIP Codes and applications placed on the Internet.
Houston ZIP codes will be added September 1. Dallas and Fort Worth will come on board November 1, followed by the rest of Texas on January 1, 1999. The MAP ultimately will serve drivers in 383 underserved ZIP codes. The MAP is available to drivers who meet the following eligibility requirements:
Voluntarily participating insurers are Allstate, Farmers, GEICO, Nationwide, Progressive, Prudential Property & Casualty, Safeco, Southern Farm Bureau and State Farm. Each has agreed to charge customers obtained through the MAP the same rates as their other standard and preferred car insurance customers. The companies may apply their normal underwriting standards in deciding whether to accept MAP applicants as policyholders. These may include driving record, auto insuranc e claim history and other factors. Continue News Release Date:8/5/1998 The Texas Department of Insurance today restricted insurance companies' ability to exclude or limit the coverage of small businesses and professional people against liability losses caused by Year 2000 computer problems. Insurance companies also were directed to add Year 2000 issues to the loss control services they provide their commercial and professional liability insurance customers. The Department issued a bulletin outlining when TDI will and won't approve commercial and professional liability insurance policy add-ons ("endorsements") that exclude or limit coverage of Year 2000 losses. Professional liability customers include doctors, hospitals, lawyers, architects, bank officers and directors, insurance agents and others in a position to be held liable for actions taken in the course of their professions. "Professional people, mom-and-pop stores and other small businesses count on their liability insurance for financial protection if an unforeseen calamity causes harm to somebody else," said Commissioner Elton Bomer. "We want to maintain that coverage for small businesses and professional people who unknowingly have a Year 2000 exposure and bought liability insurance for protection if they are sued." The bulletin does not apply to large commercial risks. Texas law defines these as businesses with insured property values of at least $5 million, annual gross revenues of at least $10 million or premiums of at least $25,000 for property insurance, $25,000 for general liability insurance or $50,000 for "multi-peril insurance" that provides both property and liability coverage. By law, commercial property and casualty policy forms for large risks are not subject to TDI's approval. TDI accepted the Insurance Services Office's nationwide endorsements excluding or limiting payment for liability claims arising from Year 2000 problems but will subject individual insurer filings to the restrictions in the bulletin. Insurance companies may use the ISO language or file their own Year 2000 endorsements for TDI approval. TDI will not approve Year 2000 exclusion endorsements for use across-the-board with all of an insurer's business and professional liability customers. The TDI bulletin informs insurers that they may not exclude Year 2000 liability coverage for such businesses and institutions as stores, restaurants, hotels, motels, churches and schools. Exceptions might be made, however, if an insurer:
If an insurance company adds a Year 2000 endorsement to a policy, the company must disclose in writing that the policy "has been modified to exclude coverage or limit coverage for loss caused by the inability or failure of a computer, or of computerized or other electronic equipment, to properly recognize a particular date or time." Upon renewal, liability policies may not include a Year 2000 endorsement without the consent of the customer. Insurance companies may exclude Year 2000 coverage from commercial property, crime, inland marine and boiler and machinery policies only if they make exceptions for claims resulting from a covered cause of loss. If, for example, a chip controlling boiler pressure failed because of a Year 2000 problem, the policy wouldn't pay for destruction of the boiler but it would pay for any resulting fire damage to the building. Continue News Release Date:7/29/1998 Commissioner Elton Bomer today told health insurers and HMOs that Texas law requires them to notify patients of their right to binding independent review of treatment denial decisions. Bomer issued a bulletin to make sure that insurance companies, HMOs and their utilization review agents (URAs) understand the notice requirements. URAs review the medical necessity and appropriateness of treatments provided or proposed for patients covered by health benefit plans. They include independent URAs contracting with HMOs as well as HMOs and insurers that conduct utilization review on their own behalf. Bomer's bulletin came in response to the unexpectedly low number of patients who have exercised their new right to independent review of treatment denial decisions. Between mid-November, when independent review began, and Tuesday, July 28, 1998, only 167 cases had been submitted for review. "We aren't sure why so few patients are seeking independent review," Bomer said. "We hope it's because managed care plans are being much more careful in their decision making. Another possibility is that patients aren't getti ng the word. I want to make sure the HMOs, insurance companies and utilization review agents understand that they're responsible for telling patients about this important new right." Of the cases submitted for independent review, 66 were decided in favor of the patient and 70 in favor of the HMO or insurance company. Eight other cases resulted in split decisions - upholding the denial of one or more recommended treatments but determining that others were medically necessary. Twenty-three decisions were pending as of Tuesday. Notice of the right to independent review must be given twice. A URA must give the first notice when reporting an "adverse determination" that a proposed treatment is inappropriate or unnecessary. Notice must be provided again if the URA's decision is upheld through the insurer's or HMO's internal appeal process. Both notices must include an independent review request form prescribed by TDI. When life-threatening conditions are involved, patients and physicians may by-pass the internal appeal process and request an immediate independent review. Bomer's bulletin includes a reminder that the patient or provider - not the HMO, insurer or URA -- determines whether a condition is life threatening. Independent review is conducted at no expense to the patient by independent review organizations (IROs) certified by TDI. Rules adopted by Bomer in November set specific deadlines for IROs to complete their reviews. Deadlines are tighter for decisions on treatment of life-threatening conditions. The decision of an IRO is binding, meaning the treatment at issue must be provided if the IRO determines it is medically necessary and appropriate. At present, the only certified IRO is the Austin-based Texas Medical Foundation. TDI encourages other qualified organizations to apply for certification. Senate Bill 386 of the 75th Legislature mandated creation of the IRO system. The same bill authorized medical malpractice suits against HMOs and health insuran ce companies. Continue News Release Date:7/21/1998 State District Judge John Dietz of Austin has permanently enjoined the Mission Cooperative Group of Kingwood against selling car insurance without a license. He also ordered distribution of the group's bank accounts to reimburse customers and to pay the state's legal expenses. Dietz' order concluded a case opened by the Insurance Fraud Unit of the Texas Department of Insurance (TDI) in August 1997. Mission Cooperative Group's $79,000 in bank accounts were frozen last November by court order. Judge Dietz's injunction order earmarks at least $55,000 for paying claims or reimbursing the $35 membership fees of policyholders without claims. Another $19,000 will be used for court costs and other legal expenses. The group called itself a "voluntary unincorporated mutual benefit association," not an insurance company. It sold auto liability coverage to people in the Houston area, San Angelo, Lubbock, Abilene, Amarillo, Tyler, Conroe and parts of East Texas. Mission Cooperative started recruiting "distributors" and selling auto coverage in May 1997. It claimed to have about 400 "independent distributors" in Texas. One of its recruiters allegedly told a meeting in San Antonio in September that Mission Cooperative planned eventually to operate in 38 states. The Fraud Unit estimates that Mission Cooperative collected about $160,000 in premiums. Named in the permanent injunction are Mission Cooperative Group; its founder and chief administrator, Dr. John C. Detloff of Kingwood, a licensed chiropractor; United Exchange Grou p of Fort Worth, the marketing arm of Mission Cooperative; Daniel Lee Swank of Humble, a trustee of United Exchange Group; Jerry Glynn Smith of Corsicana, a licensed life insurance agent who allegedly recruited "distributors" (agents) for Mission Cooperative; and Thomas Sutton of Conroe, an alleged associate of Detloff in Mission Cooperative. Mission Cooperative Group is not related to Mission American Insurance Co., Mission American Life Insurance Co., Mission Insurance Company of Texas Inc., Mission Life Insurance Co., Mission National Life Insurance Co. or Mission Premium Finance Co., which are legitimately licensed companies in Texas. TDI's Insurance Fraud Unit alleged that Mission Cooperative deceived its customers by providing them with cards stating that Mission Cooperative's coverage meets the requirements of Texas financial responsibility laws. Those laws, which most Texans meet by buying auto liability insurance, require that coverage be with "an insurance company authorized to write motor vehicle liability insurance in this state." Mission Cooperative held no such authorization, making its coverage invalid for meeting the state's financial responsibility requirements. Continue News Release Date:7/9/1998 Insurance Commissioner Elton Bomer will hold an information-gathering hearing in Houston, Thursday, August 6, to obtain testimony from victims of the Holocaust who may have been improperly denied insurance claims. The hearing will begin at 10 a.m. in the Holocaust Museum Houston, 5401 Caroline Street. Approximately 500 survivors of the Holocaust live in Texas, with the ma jority in Houston. The average age of the survivors is 82. The Texas Department of Insurance will be sending letters to all known Holocaust survivors in Texas inviting them to present evidence on denial of their insurance claims arising from World War II. Texas is a signatory to a memorandum of understanding among the states and regulators from Europe who've agreed to investigate and take appropriate action for Holocaust victims who were inappropriately denied benefits. Specific claimant information will be forwarded to the National Association of Insurance Commissioners, which is compiling information nationwide in an effort to resolve the issues surrounding the claims of Holocaust victims. Continue News Release Date:7/8/1998 Commissioner Elton Bomer signed a consent order on Tuesday fining NYLCare Health Care Plans of the Gulf Coast Inc. $100,000 for HMO violations, including quality of care issues identified in examinations conducted last year. The Houston-based HMO, which is being acquired by Aetna US Healthcare, agreed to TDI's findings and also agreed to pay the $100,000 administrative penalty. Although a few minor areas remain to be corrected, NYLCare has corrected the major violations found by Texas Department of Insurance examiners. According to TDI attorneys, Aetna assured the Department that the HMO would continue to comply with all Texas laws and rules following the acquisition. The violations were discovered during NYLCare's routine triennial financial and compliance examinations in 1997. Examiners found that NYLCare was out of compliance with Texas laws and rules in areas that incl ude access to primary care providers, quality assurance including peer review and complaint and grievance appeals procedures. In addition to the fine, Bomer ordered NYLCare and its successors to take the following actions:
Continue News Release Date:7/6/1998 Insurance Commissioner Elton Bomer today placed consumer credit property insurance under new regulations designed to improve competition and save money for consumers. Consumer credit property insurance protects property from theft or other loss or damage while the property is being paid off. It usually is sold through retailers with limited agents licenses from the Texas Department of Insurance (TDI), but until adoption of the new regulations, which take effect January 1, 1999, rates and policy forms have been unregulated. "I want to make sure that consumers know exactly what they are paying for and that they are making informed decisions when they decide whether to purchase consumer credit property insurance," Bomer said. "These regulations accomplish those goals and are fai r to both the sellers and the buyers of this type of insurance." Under the adopted regulations, TDI will control rates and policy language. Also, retailers must clearly point out to prospective buyers that the coverage might duplicate existing residential property coverage. Other key points that must be explained to the purchaser include:
Bomer held a hearing on the credit property insurance issue on April 9. A TDI staff report at that hearing said allowing the coverage to be sold "in its current unregulated status invites consumer abuses." Last January, Bomer and officials of Montgomery Ward signed a consent order under which the company agreed to offer refunds to customers who bought a "Credit Security Plan" without realizing it was insurance. Refunds could total as much as $5 million if all customers who unwittingly bought the insurance seek a refund. Bomer said today that studies showed loss ratios on credit property insurance industrywide in 1996 were materially lower than on any other type of credit insurance. He said that indicates not only that rates were too high but also that many consumers may not know the coverage exists. "I believe that credit property insurance should be available in Texas, but it should be available as a regulated insurance product, and the rule will provide that needed regulation," Bomer said. Continue News Release Date:7/6/1998 Insurance Commissioner Elton Bomer today officially changed the effective date for the new building code for windstorm resistant construction from June 1, 1998, to September 1, 1998. Bomer cited a shortage of building materials needed to implement the new code as one reason for the delay. He also said this will provide time for the Texas Windstorm Insurance Association (T.W.I.A.) to propose policy changes that will cover additional costs for rebuilding homes in conformity to the higher standards of the new code. "I fully expect everything to be in place for builders to begin putting new homes into compliance with the new building code on September 1," Bomer said. "In fact, builders don't have to wait until September 1 to bring new homes into compliance with the code." New and remodeled homes constructed after September 1 must meet new building code standards to qualify for T.W.I.A. coverage. The new building code calls for windows, doors and garage doors to withstand the impact of flying debris. The code also calls for strengthening foundations, frames and roofs. Bomer proposed the delay in late May and held today's public hearing to make it official. Continue News Release Date:7/1/1998 Insurance Commissioner Elton Bomer today approved a plan that will allow drivers involved in accidents with less than $1,000 in property damage, including auto repairs, the opportunity to avoid having their insurance premiums go up. The "fender bender" rule will raise the current $500 property damage limit to $1,000 before an insurance company may surcharge a driver's auto insurance policy. The normal surcharge for an accident is 15 percent of a county's lowest benchmark rate for liability, collision, personal injury protection (PIP) and medical payments insurance. Surcharges may remain on a premium for three years. "These thresholds were set back in 1985 and inflation has affected everything, including the price for auto repairs," Bomer said. "Drivers involved in minor accidents where relatively little damage has occurred should not be punished in the form of higher insurance rates." Bomer also eliminated the surcharge for bodily injuries occurring from an accident. "If someone is hurt in an auto accident, there is likely to be considerable damage to the vehicle," Bomer said. "This will trigger the necessary surcharge that an at-fault driver should receive." The new rule applies to rate-regulated insurance companies, which write about 70 percent of the Texas auto insurance market. It would not apply to county mutual insurers, which are exempt from rate regulation. The "fender bender" rule takes effect September 1, 1998. Continue News Release Date:7/1/1998 The owner of the Chuck Wagon restaurant located in a historic building in New Boston has been charged with setting fire to his business. Bobby Easterling, 40, of Hooks, surrendered to officers this afternoon at the New Boston Police Department and was released from custody after posting $5,000 bond. Easterling was charged with arson, a second degree felony, and if convicted, faces two to 20 years in prison and up to a $10,000 fine. The building housing the popular restaurant was originally built in 1890 and was one of the oldest structures in New Boston. Firefighters from the New Boston Fire Department were called to fight the blaze on the morning of May 26. The building was destroyed. Easterling claimed he was robbed by three men and locked inside the restaurant's walk-in cooler. When he escaped, he told investigators his restaurant was on fire. State Fire Marshal investigator Mike Smith says Easterling's injuries were not consistent with his report to investigators. The State Fire Marshal's Office, New Boston Police Department and New Boston City Fire marshal assisted in the investigation. Continue News Release Date:6/30/1998
Continue News Release Date:6/30/1998 LOCAL ANGLE FOR AUSTIN, EL PASO AND LOWER VALLEY Starting Wednesday, a toll-free phone call is all it will take for good drivers in underserved ZIP codes of Austin, El Paso and the Lower Rio Grande Valley to get help in lowering their car insurance costs. Wednesday is launch day for Phase One of the Texas Department of Insurance's new automobile liability insurance Market Assistance Program (MAP). When the phase-in is completed on January 1, 1999, the program will serve almost 400 ZIP Codes. The number to call is 1-888-799-MAPP (6277). "Good drivers shouldn't pay bad driver rates," said Commissioner Elton Bomer. "Unfortunately, some do because they were inappropriately placed in Texas' assigned risk plan or in county mutual insurance companies that specialize in insuring high-risk drivers. For these drivers, a few minutes on the phone could save hundreds of dollars in lower insurance costs." TDI will add underserved ZIP codes in Houston to the auto MAP on September 1, Dallas and Fort Worth on November 1 and the rest of the state on January 1, 1999. Applications from eligible drivers will go to nine insurance company groups that are participating voluntarily: Allstate, Farmers, GEICO, Nationwide, Progressive, Prudential Property & Casualty, Safeco, Southern Farm Bureau and State Farm. Together, they write about two-thirds of the car insurance sold in Texas. Each insurer has agreed to charge customers obt ained through the MAP the same rates as their other standard and preferred car insurance customers. The MAP is available to drivers who meet the following eligibility requirements:
The MAP is open to any eligible driver, including those who already have car insurance. Its goal is to help good drivers find lower priced liability coverage more in keeping with their driving records. Toll free calls will be answered by employees in TDI's MAP Section, which also operates the Department's market assistance program for residential property insurance. A MAP staff member first will ask the caller's ZIP code and whether the caller or any family member living in his or her household has had any citations for moving violations or at-fault accidents in the past three years. If the answers indicate possible eligibility, the MAP staffer then will offer to take the caller's application. The application - called a Consumer Profile -- will include each applicant's driver's license number, address, phone number, birth date, gender, year, make and model of vehicle and current auto insurance carrier. If other drivers are in the household, the Customer Profile will include their names and drivers' license numbers or birth dates. The MAP section will ask the Texas Department of Public Safety for each applicant's Motor Vehicle Record (MVR) for the preceding three years to verify the absence of citations for moving violations or at-fault accidents. Only applications in which all drivers to be covered have clean MVRs will be deemed eligible and forwarded to insurance companies. TDI will provide eligible applications to the participating insurers by means of the Internet. The information will be password-protected to safeguard the privacy of applicants. A company may apply its normal underwriting standards in deciding whether to accept a MAP applicant as a policyholder. Companies also are free to obtain information from sources other than a driver's MVR for use in deciding whether to offer coverage. This additional information will likely include a person's auto insurance claim history. Although the MAP is designed to help consumers find less expensive auto liability policies, insurers may offer additional coverages, such as collision and comprehensive, at preferred or standard rates. TDI will develop statistics on the auto MAP's results. When a company offers a policy to an applicant, it must report the coverage and the premium. When an insurer rejects an application, it must report the reasons. Continue News Release Date:6/29/1998 The Texas Department of Insurance warned today that someone is canceling Medicare supplement insurance policies in the Tyler area without the policyholders' permission or knowledge. "We have received numerous complaints regarding forged letters sent to insurance companies canceling Medicare supplement policies in the Tyler area," Insurance Commissioner Elton Bomer said. "This is a very serious matter and we want both policyho lders and insurance companies to be aware of the problem." Bomer said in some instances insurance companies cancelled policies based on forged letters and only discovered the true situation when they notified the policyholders of the cancellations. The letters appear to be mailed in Tyler using senior citizens' addresses in the area. Medicare supplement insurance helps pay for senior citizens' medical costs not covered by Medicare. Insurance companies concerned about the problem hav e notified TDI's Insurance Fraud Unit, the FBI, the U.S. Attorney's Office and the U.S. Postal Service.Continue News Release Date:6/24/1998 NOTE: Houston Area Interest State Fire Marshal G. Mike Davis has fined a fire extinguisher inspection company $25,000 for failure to properly inspect fire extinguishers in the Houston area. Aztec Fire Extinguisher Service and Sales Company, 1709 Benbow Way, Houston, agreed to the fine along with a one-year suspended revocation of the company's certificate of registration. The certificate allows Aztec to install and service portable fire extinguishers. "We are escalating our efforts to crack down on firms that have failed to properly inspect fire extinguishers in Texas, but it won't be our last," Davis said. "Let this be a warning that this type of activity will not be tolerated." A fire extinguisher technician license issued by the State Fire Marshal's Office requires individuals to thoroughly inspect fire extinguishers in accordance with adopted national standards, by checking the container's contents, pressure and overall condition. Building codes call for periodic maintenance and hydrostatic testing of certain fire extinguishers. This usually occurs at 6- and 12-year intervals. Extinguishers beyond repair must be replaced with new ones. "Through surveillance by State Fire Marshal licensing investigators and assistance from local fire officials, we know the employees simply cleaned the outside of the fire extinguishers and then placed a new inspection tag on each one," Davis said. "Aztec inspectors charged the same amount of money as if they had performed a thorough inspection." As part of their penalty, Aztec has agreed to re-test extinguishers they've inspected since May 1, 1997, at no cost to customers. They will submit inspection records for verification. The State Fire Marshal's Office became a part of the Texas Department of Insurance on September 1, 1997. Continue News Release Date:6/23/1998 Three more training seminars on the state's new windstorm building code have been scheduled for coastal cities. The seminars have been scheduled as follows:
The one-day seminars will be held from 8 a.m. until 5 p.m. Engineers and windstorm inspectors with the Texas Department of Insurance (TDI) will offer education and training on the new building code for windstorm resistant construction. Insurance Commissioner Elton Bomer is expected to take action on a proposed rule that would move the effective date of the building code to September 1, following a July 6 hearing. The request for delay is a result of the shortage of approved building products along the Texas coast. The effective date originally was set for June 1. TDI has already conducted 12 training seminars on the new building code this year. Course topics include: limitations, foundations, wood stud wall framing, uplift connections, framing around openings, wall bracing, ceiling framing, roof framing, roof coverings, doors and windows, exterior coverings, awning and overhangs. The training sessions are free, but participants must provide their own copy of the Building Code for Windstorm Resistant Construction. The building code booklet is a part of a windstorm construction document package that participants can either order from TDI for $72 or download from TDI's website at www.tdi.state.tx.us. While the seminars are aimed at builders, contractors and architects, the sessions are open to the public. Continue News Release Date:6/22/1998 Former insurance agent and ex-convict William Harold Baker of Katy has drawn a 10-year prison sentence for falsifying his application for a new license by lying about his past and submitting somebody else's fingerprints and Social Security number to conceal his identity. State District Judge Wilford Flowers of Austin approved a plea bargain in which Baker, 52, pleaded guilty to making false statements on a written instrument and accepted the maximum sentence for the offense. The Insurance Fraud Unit of the Texas Department of Insurance investigated the case and turned it over to Travis County District Attorney Ronnie Earle's office for prosecution. Under Texas law, the Travis County DA has statewide jurisdiction over insurance crimes. Baker formerly held a life insurance agent's license and sold insurance in Houston. His license expired in 1994 while he was serving a prison sentence for stealing $191,094 from two of his insurance customers. Baker was paroled on September 9, 1996. In March 1997, Baker applied for a new life insurance agent's license. On the application, he lied about his employment history, previous licensure, indebtedness to clients and insurers and cancellation of his appointment by an insurance company. In addition, he used a Social Security number other than his own and submitted a fingerprint card that had somebody else's fingerprints on it. The identity of the person who provided the fingerprints is still under investigation. "Mr. Baker's case should serve as a warning to anybody who is tempted to use fraud and deception to obtain an agent's license," said Linda Bayless, associate commissioner of the Fraud Unit. Continue News Release Date:6/18/1998 Two GEICO companies agreed today to refund an estimated $500,000 to $700,000 in auto insurance premium overcharges paid by approximately 35,000 Texas customers in February and March. Average refunds are estimated at $15 to $20 per policyholder. GEICO officials consented to an order signed by Commissioner Elton Bomer requiring restitution to customers who paid too much. In agreeing to the order, GEICO admitted no wrongdoing. "GEICO did the right thin g by its customers in agreeing to return money it over-collected for auto coverage," Bomer said. "I appreciate the company's cooperation in putting this issue behind us." Government Employees Insurance Co. and GEICO General Insurance Co. charged the rates until March 17, 1998, the effective date of new rates found acceptable by the Department. Customers eligible for restitution will be those who bought or renewed policies before March 17 but with effective dates on or after March 17. Restitution will be the difference between what they actually paid and what they would have paid under the rates accepted by TDI. Active GEICO customers who still owe on their policies will receive credits reducing their unpaid balance or may opt to receive checks. Former customers and those with canceled policies that were effective on or after March 17 will receive checks. GEICO will report monthly to TDI on its progress in making the restitution payments. TDI actuaries challenged GEICO's original rates on grounds that they allowed too much for profit and expenses, used a trending method that exaggerated anticipated claims and failed to treat interest on installment payments as income. Continue News Release Date:6/16/1998 Consumers who bought auto liability insurance from Snappy Car Rental Inc. between January 1, 1995 and October 1, 1997, or from Rent-A-Wreck from January 1, 1997 to July 1, 1997 are entitled to refunds, Insurance Commissioner Elton Bomer announced today. The refunds involving Snappy Car Rental Inc. could total as much as $4,159 based on about 1,200 rental agreements. The refunds inv olving Rent-A-Wreck could total as much as $3,032.00 based on an estimated 951 policies issued. Both companies entered into consent orders with the Texas Department of Insurance. In the consent orders, the Department alleged that Snappy and Rent -A-Wreck engaged in the unauthorized sale of insurance. The rental companies denied any wrongdoing but agreed to make the refunds and cease selling liability products in Texas except those approved by the Department and sold through duly licensed persons. Snappy agreed to make refunds upon request to customers who purchased supplemental liability insurance between January 1, 1995, and October 1, 1997. The refund will be $2.05 for each day the consumer paid $6.95 for supplemental liability insurance. Snappy listed 18 locations in Texas: four in Houston, two each in Dallas and San Antonio, and one each in Richardson, Irving, Duncanville, Arlington, Hurst, Fort Worth, Humble, Beaumont, Austin and Amarillo. Under the consent order, consumers who believe they are entitled to refunds from Snappy Car Rental should write to Snappy Car Rental Inc., 4111 S. Arlington, Tulsa, OK 74135. Rent-A-Wreck agreed to make refunds upon request to customers who purchased supplemental liability insurance between January 1, 1997, and July 1, 1997. The refunds will be $3.19 for each day the consumer paid $8.95 for supplemental liability insurance; $2.19 for each day the consumer paid $7.95; $5.19 for each day the consumer paid $10.00 for supplemental liability insurance; or $3.29 for each day the consumer paid $9.00 for supplemental liability insurance. Rent-A-Wreck listed 14 locations in Texas: two in Austin, one each in Dallas, College Station, Corpus Christi, Richardson, Garland, Levelland, North Richland Hills, New Braunfels, Plano, San Antonio, Tyler, and Vidor. Under the consent order, consumers who believe they are entitled to refunds from Rent-A-Wreck should write to Rent-A-Wreck of America, Inc., 11460 Cronridge Drive, Suite 118, Owings Mil ls, Maryland, 21117. These are two of a series of consent orders between the Department and various car rental firms over the past year dealing with the alleged unauthorized sale of liability insurance. A new law passed by the Texas Legislature and effective on September 1, 1997, settled the dispute by setting up a method for rental car companies or their franchisees to be licensed to sell insurance related to their rentals. Refunds were ordered for sales made prior to licensing. Snappy and Rent-A-Wreck will each pay the Department $1,000 in reimbursement for investigative costs and administrative fees. Continue News Release Date:6/12/1998 State Fire Marshal G. Mike Davis today urged Texans to use caution and obey the law while using fireworks during the upcoming Fourth of July celebration. "Many parts of the state remain dry and susceptible to sparks from fireworks," Davis said. "People using fireworks should be aware of the environment around them so they don't start fires that could lead to injuries and the destruction of property." As of Thursday, 80 Texas counties have banned outdoor burning which calls for a ban on any open fires outside closed containers. In addition, to ban the use of certain aerial fireworks, counties must qualify under the Keetch-Bryam Drought Index offered by the Texas Forest Service. If qualified, county commissioners must institute the ban before June 15. Fireworks go on sale in Texas June 24 through July 4. Davis said one of the safest and least expensive ways to enjoy fireworks is attending a public display. This year mo re than 250 Texas cities and private enterprises will hold public displays. Davis says public awareness to the potential danger of fireworks may be paying off. For the first time in several years the number of hospital emergency room injuries due to the use of fireworks has gone down. Forty percent of fireworks injuries are burns to the hands, eyes, and head. Children under age 15 sustain about a third of these injuries. Davis urged Texans to use common sense and follow safety guidelines when using fireworks. Always read and follow label directions.
For information about state laws regarding the use of fireworks in Texas, persons can contact the State Fire Marshal's Office at (512) 305-7900. Continue News Release Date:6/12/1998 State Fire Marshal G. Mike Davis today urged Texans to use caution and obey the law while using fireworks during the upcoming Fourth of July celebration. "Many parts of the state remain dry and susceptible to sparks from fireworks," Davis said. "People using fireworks should be aware of the environment around them so they don't start fires that could lead to injuries and the destruction of property." As of Thursday, 80 Texas counties have banned outdoor burning whi ch calls for a ban on any open fires outside closed containers. In addition, to ban the use of certain aerial fireworks, counties must qualify under the Keetch-Bryam Drought Index offered by the Texas Forest Service. If qualified, county commissioners must institute the ban before June 15. Fireworks go on sale in Texas June 24 through July 4. Davis said one of the safest and least expensive ways to enjoy fireworks is attending a public display. This year more than 250 Texas cities and private enterprises will hold public displays. Davis says public awareness to the potential danger of fireworks may be paying off. For the first time in several years the number of hospital emergency room injuries due to the use of fireworks has gone down. Forty percent of fireworks injuries are burns to the hands, eyes, and head. Children under age 15 sustain about a third of these injuries. Davis urged Texans to use common sense and follow safety guidelines when using fireworks. Always read and follow label directions.
For information about state laws regarding the use of fireworks in Texas, persons can contact the State Fire Marshal´s Office at (512) 305-7900. Continue News Release Date:6/8/1998 A brochure offering assistance to persons who can't find home insurance coverage has been translated into Vietnamese. The brochure is called the Texas Market Assistance Program (MAP): Your MAP to Insurance. "We're trying to reach every Texan who needs help in obtaining homeowners insurance," said Commissioner Elton Bomer. "Translating our Market Assistance Program brochure into Vietnamese should help our state's large Vietnamese population." The 1995 Legislature created the Market Assistance Program to address home insurance availability problems. MAP is available to people in 427 ZIP codes identified by the Texas Department of Insurance (TDI) as underserved areas for residential property insurance. A home denied coverage by at least two insurance companies is eligible for the MAP. MAP can help homeowners, renters and persons living on farms and ranches. Persons wanting to apply can contact TDI's toll-free line at 1-888-799-MAPP (6277). Employees answer questions, initiate insurance applications and fax completed applications to the 20 participating companies. This is TDI's first Vietnamese brochure and the Consumer Protection Program's Associate Commissioner Audrey Selden says more are on the way. "While the MAP brochure may be our first, it won't be our last," Selden said. "Future publications will include Helping You with Your Insurance Complaint and Automobile Insurance Made Easy." Some callers to the MAP's toll-free number may have insurance with licensed companies but seek a lower price. Although they may not be eligi ble for MAP, staff will provide these callers with information on smart shopping for lower prices, including the availability of TDI's county-specific rate comparison guides. For a free copy of the Texas Market Assistance Program (MAP): Your MAP to Insurance in English, Spanish or Vietnamese or homeowners rate guides, call TDI at 1-800-599-SHOP (7467), or in Austin call 305-7211. TDI brochures also are available on TDI's web site, www.tdi.state.tx.us Continue News Release Date:6/5/1998 Here are the 153 communities that have received a revised PPC fire-protection classification from ISO from "9/9" to "7/9." This list is made up of 88 previously listed, including 72 noted in a March 12, 1998, news release, plus 65 additional ones noted in a June 5, 1998, news release.
Continue News Release Date:6/5/1998 Link to List of 65 Additional Communites with New PPC Ratings NOTE TO NEWS MEDIA: For a list of the 65 new communities or lists of all 153 affected, call the Public Information Office at (512) 463-6425 or visit the TDI web site (www.tdi.state.tx.us). The Texas Department of Insurance (TDI) has approved temporary fire protection classifications that will help hold down homeowners rate increases in 65 more communities that are awaiting evaluations by the Insurance Services Office (ISO). This is in addition to 88 communities that earlier had received improvements in their temporary ISO Public Protection Classifications (PPCs). Also, some homeowners in all 153 communities could receive premium refunds for the revised classification. In a bulletin issued this week, TDI asked insurance companies to change the rates on policies issued on and after the date insurers filed rates under the new PPC program. The change must reflect the corrected premium for the revised temporary PPC in the designated communities. "Insurers may use the most reasonable and economically feasible method of correcting policies to reflect the correct PPC and in providing any necessary return premium to the insureds," the bulletin said. Commissioner Elton Bomer's approval of the temporary PPC improvements will soften adverse effects that changing to the PPC could have on communities that piggy-backed on the rates of nearby cities under the old system. For homes within 1,000 feet of a fire hydrant, temporary "Public Protection Classification" ratings will improve by two points, from "9" to "7" on a scale of 1 (best) to 10 (worst). The rating remains at "9" for homes more than 1,000 feet from a fire hydrant. The new rating for each community is written as "7/9," instead of "9/9." The "7/9" will remain in effect until ISO can survey the communities and recommend permanent PPC ratings to TDI. As a result, homeowners rates for frame houses in those communities will be 29 percent lower and rates for brick veneer houses will be 6.5 percent lower than they otherwise would have been. These percentages apply only to homes insured by rate-regulated insurance companies. Companies not subject to rate regulation are free to apply different factors reflecting fire protection and type of construction. All 153 communities are in rural or suburban areas that previously benefited from a "fringe" rule used under the obsolete "key rating system." That rule allowed homeowners in small communities to benefit from the fire protection rating of any city within five miles of their boundaries, so long as a house was within 1,000 feet of a fire hydrant. Effective February 1, 1998, Bomer discontinued the "key rating system" in favor of ISO's more up-to-date PPC system, which requires that all communities be graded solely on their own fire protection abilities. All other states already used the PPC system. "It was important that Texas join the rest of the nation in adopting a modern rating system," Bomer said today. "This is a massive change, and I want to take reasonable steps to help relieve some of the inevitable pain and problems associated with it." Bomer previously had capped homeowners rate changes resulting from the change in fire protection grading systems at 10 percent for the first year and 21 percent for the second year. Continue News Release Date:6/5/1998 Here are the 65 new communities whose temporary PPC ratings were reduced by the Texas Department of Insurance. (See news release dated June 5, 1998.) GRADED AREA NAME COUNTY* ANDERSON MILL WILLIAMSON ANTHONY EL PASO ARCOLA FORT BEND AXTELL McLENNAN BACLIFF GALVESTON BEVERLY HILLS McLENNAN BLOOMBURG CASS BLOSSOM LAMAR BROOKSTON LAMAR BRUCEVILLE-EDDY McLENNAN BUCKINGHAM DALLAS BULLARD SMITH CANUTILLO EL PASO CE-BAR VFD TRAVIS CENTRAL GARDENS JEFFERSON CHINA GROVE BEXAR CORINTH DENTON DEL VALLE TRAVIS DODD CITY FANNIN EAST MOUNTAIN UPSHUR ELM MOTT McLENNAN ELMENDORF BEXAR ELMO KAUFMAN FATE ROCKWALL FLINT SMITH GLIDDEN COLORADO GOODRICH POLK HOCKLEY HARRIS HORIZON CITY EL PASO HUFFMAN HARRIS INGLESIDE ON THE BAY SAN PATRICIO JONESTOWN TRAVIS JOSHUA JOHNSON LA VILLA HIDALGO LAKE TANGLEWOOD RANDALL LAKESIDE TARRANT LATEXO HOUSTON LAVON COLLIN LAWRENCE KAUFMAN LINDSAY COOKE LITTLE RIVER ACADEMY BELL MARTINDALE CALDWELL MELISSA COLLIN MILDRED NAVARRO MILLSAP PARKER MORGAN'S POINT RESORT BELL OAK RIDGE NORTH MONTGOMERY ONION CREEK TRAVIS PLEAK FORT BEND PONDER DENTON POTOSI TAYLOR QUEEN CITY CASS RENDON TARRANT RENO LAMAR SADLER GRAYSON SANCTUARY PARKER SANTA ROSA CAMERON SCURRY KAUFMAN SOUTHMAYD GRAYSON SPLENDORA MONTGOMERY SUNSET VALLEY TRAVIS THRALL WILLIAMSON VINTON EL PASO WESTOVER HILLS TARRANT WESTWORTH TARRANT * (May extend into other counties.) GRADED AREA NAME COUNTY Bell LITTLE RIVER ACADEMY BELL MORGAN'S POINT RESORT BELL Bexar CHINA GROVE BEXAR ELMENDORF BEXAR Caldwell MARTINDALE CALDWELL Cameron SANTA ROSA CAMERON Cass BLOOMBURG CASS QUEEN CITY CASS Collin LAVON COLLIN MELISSA COLLIN Colorado GLIDDEN COLORADO Cooke LINDSAY COOKE Dallas BUCKINGHAM DALLAS Denton CORINTH DENTON PONDER DENTON El Paso ANTHONY EL PASO CANUTILLO EL PASO HORIZON CITY EL PASO VINTON EL PASO Fannin DODD CITY FANNIN Fort Bend ARCOLA FORT BEND PLEAK FORT BEND Galveston BACLIFF GALVESTON Grayson SADLER GRAYSON SOUTHMAYD GRAYSON Harris HOCKLEY HARRIS HUFFMAN HARRIS Hidalgo LA VILLA HIDALGO Houston LATEXO HOUSTON Jefferson CENTRAL GARDENS JEFFERSON Johnson JOSHUA JOHNSON Kaufman ELMO KAUFMAN LAWRENCE KAUFMAN SCURRY KAUFMAN Lamar BLOSSOM LAMAR BROOKSTON LAMAR RENO LAMAR McClennan AXTELL McLENNAN BEVERLY HILLS McLENNAN BRUCEVILLE-EDDY McLENNAN ELM MOTT McLENNAN Montgomery OAK RIDGE NORTH MONTGOMERY SPLENDORA MONTGOMERY Navarro MILDRED NAVARRO Parker MILLSAP PARKER SANCTUARY PARKER Polk GOODRICH POLK Randall LAKE TANGLEWOOD RANDALL Rockwall FATE ROCKWALL San Patricio INGLESIDE ON THE BAY SAN PATRICIO Smith BULLARD SMITH FLINT SMITH Tarrant LAKESIDE TARRANT RENDON TARRANT WESTOVER HILLS TARRANT WESTWORTH TARRANT Taylor POTOSI TAYLOR Travis CE-BAR VFD TRAVIS DEL VALLE TRAVIS JONESTOWN TRAVIS ONION CREEK TRAVIS SUNSET VALLEY TRAVIS Upshur EAST MOUNTAIN UPSHUR Williamson ANDERSON MILL WILLIAMSON THRALL WILLIAMSON Continue News Release Date:6/4/1998 Commissioner Elton Bomer has issued an order revoking the license of an Arizona company that until recently was the state's biggest lender of money to pay personal car insurance premiums. Bomer revoked the license of National IPF Inc. of Mesa, Ariz., doing business under the name Emerald Finance Co. Emerald has the right to file a motion for rehearing and then to appeal the order to a state district court in Austin. However, Emerald indicated earlier this year it was voluntarily leaving the Texas premium finance market. As of December 31, 1996, Emerald was licensed to finance premiums in 25 states, including Texas. In 1996, Emerald was Texas' largest lender of money to pay personal auto insurance premiums, with $64.8 million in loans. It lent primarily to consumers buying coverage from county mutual insurance companies, which specialize in "high risk" auto policies. The Texas Department of Insurance's Financial Program conducted a comprehensive examination of Emerald for the 12-month period ending March 31, 1996. As of that date, Emerald had 20,259 Texas premium finance agreements in force. Bomer's order noted that Emerald's annual financial report for the year that ended December 31, 1996, showed a negative $21.8 million in net assets. Texas law requires premium finance companies to maintain at least $25,000 in net assets at all times. Emerald has not filed a 1997 report. Bomer's order cited numerous violations of Texas insurance laws. These included illegal incentives given by Emerald to Summer Marketing, which formerly operated a chain of insurance agencies in the Dallas-Fort Worth area. Among other things, Emerald participated in an arrangement to indirectly finance motor club memberships that Summer Marketing allegedly "slid" onto the auto policies of unsuspecting consumers. Dues for motor club memberships sold by Summer Marketing averaged $100 - all but $10 of which was kept by Summer Marketing as commission. Texas law prohibits premium finance companies from financing motor club memberships. It also prohibits "sliding" of unwanted coverages onto consumers' auto policies. Bomer revoked Summer Marketing's insurance agent's license on December 30, 1997, primarily for "sliding." Continue News Release Date:6/2/1998 Link to Internet Complaint Information System Beginning today, Texas will be among the first states in the nation to give the public Internet access to detailed information on complaints against insurance companies and HMOs. An Internet Complaint Information System (ICIS) that lists certain individual complaints by company and provides statistical analyses by insurance type and geographic region is available at the Texas Department of Insurance web site (www.tdi.state.tx.us). "Most of the information we collect at TDI is open to the public, but access to detailed data can be cumbersome at times. Our decision to provide complaint data routinely over the Internet is one more way to make important information available to more people," Commissioner Elton Bomer said today. The ICIS includes individual com plaint information that can be downloaded for further study and tables containing such data as number and percentage of complaints by line of insurance and by region, as well as reasons for the complaints. In general, the analyses show claim delays as the reason given most often for filing a complaint. The following table includes examples of the primary reasons given for complaints against HMOs, health insurance companies, auto insurers and home insurers: First Quarter 1998
Residents of Northeast Texas, which includes Dallas, also file more complaints than any other region of the state. This comparison, however, does not take population differences into account. During the first quarter of 1998, 27.8 percent of all insurance-related complaints came from Northeast Texas (ZIP codes that begin with 75) and only 6.52 percent came from West Texas (ZIP code 79). Southeast Texas (ZIP code 77) provided 23.51 percent; South Texas (ZIP code 78), 18.84 percent; North Central Texas (ZIP code 76), 14.27 percent; and points outside Texas, 5.06 percent. No origin was given for 3.98 percent. "We haven´t surveyed every state, but we believe ICIS provides mor e complete data on more lines of insurance than is available on the Internet from any other regulator," Bomer said. Continue News Release Date:6/1/1998
Continue News Release Date:6/1/1998 Commissioner Elton Bomer today announced a Texas Department of Insurance initiative to help good drivers in almost 400 underserved ZIP codes find reasonably priced auto liability insurance. TDI will launch the auto insurance Market Assistance Program (MAP) in four stages. It will start July 1 in El Paso and Travis counties and the Lower Rio Grande Valley; September 1 in Harris County; November 1 in Dallas and Tarrant counties; and January 1, 1999, in the rest of the state. "We often hear that many good drivers pay too much for car insurance because they were stuck in high-risk county mutual companies or in the assigned risk plan," Bomer said. "I want to make sure these drivers have a shot at less expensive coverage. The MAP is their chance to save money -- sometimes hundreds of dollars." Applications from eligible drivers will go to eight insurance company groups that agreed to participate after their executives met with Bomer. Insurers voluntarily participating in the auto MAP are Allstate, Farmers, GEICO, Nationwide, Progressive, Prudential Property & Casualty, Southern Farm Bureau and State Farm. Together, they write about two-thirds of car insurance sold in Texas. The insurers must agree to insure MAP applicants at the rates charged their standard and preferred customers. The MAP will be available to drivers who meet the following eligibility requirements:
Drivers can get help from the MAP even if they already have car insurance. The purpose is to help good drivers find lower priced liability coverage more in keeping with their driving records. All a consumer must do to get assistance is call TDI's MAP Unit at a toll-free phone number. This unit also operates TDI's residential property insurance Market Assistance Program. A MAP staff member first will ask the caller's ZIP code and whether the caller or any family member living in his or her household has had any traffic tickets or accidents in the past three years. If the answers indicate possible eligibility, the MAP staffer then will offer to take the caller's application. The application - called a Consumer Profile -- will include each applicant's driver's license number, address, phone number, birth date, gender, year, make and model of vehicle and current auto insurance sta tus. If other drivers are in the household, the Customer Profile will include their drivers' license numbers or birth dates. The MAP section will ask the Texas Department of Public Safety for each applicant's Motor Vehicle Record (MVR) for the preceding three years to verify the absence of citations for moving violations or at-fault accidents. Only applications in which all drivers to be covered have clean MVRs will be deemed eligible and forwarded to insurance companies. TDI plans to use the Internet to transmit each eligible application to all eight participating insurance company groups. The information will be password-protected. A company may apply its normal underwriting standards in deciding whether to accept a MAP applicant as a policyholder. Insurers will contact applicants directly or through agents if they need more information before deciding whether to sell them car insurance policies. Although the MAP is designed to help consumers find less expensive liability policies, insurers may offer additional coverages, such as collision and comprehensive, at preferred or standard rates. Continue News Release Date:5/27/1998 Commissioner Elton Bomer today reduced Texas title insurance rates by 3 percent, an action that should save Texas home buyers an estimated $20 million per year in premiums. The rate cut, the first since 1978, will lower the closing costs on a $100,000 home by $31. New rates take effect on August 1, 1998. "Even though home prices have risen substantially since 1991, losses have been low. Given the overall projected strength of the industry, home buyers deserve a b reak on their title rates," Bomer said. Unlike most Texas insurance rates, title rates are set by the Commissioner of Insurance and must be charged by all title companies. At his November 18-20, 1997, hearing Bomer received recommendations ranging from a reduction of about 12 percent to an increase of 8.5 percent. Title insurance premiums usually are part of the closing costs that buyers pay just before taking possession of a home. Title insurance most commonly protects the lender, who holds title to the property until the borrower pays off the loan. Policies also are available to protect the home buyer´s interest if a title turns out to be defective. The vast majority of title insurance premiums go to title agents, who are responsible for verifying from official records that there is no cloud -- such as unpaid property taxes -- on a property´s title. Bomer left the premium split at 82.25 percent for title agents and 17.75 percent for title insurance companies. Sample rate changes follow:
Continue News Release Date:5/27/1998 Texas Insurance Commissioner Elton Bomer will consider delaying implementation of the new coastal building code for windstorm resistant construction from June 1 until September 1. A July 6 hearing date has been set to conside r delaying the new building code. "It has been brought to my attention that materials needed for the new building code are in short supply," Bomer said. "Giving homebuilders 90 days would be ample time for materials to be in place." Bomer also will work with the Texas Windstorm Insurance Association (T.W.I.A.) to change its policies to provide additional coverage for rebuilding homes in conformity to the higher standards of the new building code. Bomer urged homebuilders not to wait in implementing the new building code. "The sooner builders begin implementing the new building code, the more knowledgeable they'll become in meeting the needs of new home buyers," Bomer said. The new building code updates the 1973 standard building code, now in effect, by strengthening construction standards. The new building code calls for windows, doors and garage doors of houses in certain areas to withstand the impact of flying debris. The code also calls for strengthening foundations, frames and roofs. Building contractors say some of the construction materials needed to implement the new building code have been hard to find. Last summer, Bomer approved a three-tier system for applying the new code.
Between February 25 and May 12, TDI engineers conducted 12 training sessions in coastal cities educating contractors, architects and builders on the new building code. Homes and non-engineered buildings constructed after the new building cod e takes effect, must meet the new standards to qualify for coverage by the T.W.I.A. The new code embodies the results of more than 25 years of research on wind-resistant construction, including lessons learned from Hurricane Andrew in 1992. Presently, T.W.I.A. policies don't provide coverage for construction upgrades that would meet the new building code standards. Bomer says that may soon change. "State officials have brought this potential problem to my attention and it is being addressed," Bomer said. Creation of the new building code dates back to the passage of House Bill 2 by the Texas Legislature in 1991. On November 30, 1995, TDI's Building Code Advisory Committee approved the proposed code with a recommendation to the Commissioner for adoption. During 1994 and 1995 TDI conducted 16 public hearings along the coast and made numerous changes in response to the testimony received. Continue News Release Date:5/26/1998 Commissioner Elton Bomer has ordered an unlicensed Caribbean company to stop selling medical malpractice insurance to Texas doctors. His order became final today. Bomer issued a cease-and-desist order to Western Guarantee & Assurance Company Ltd. of St. Vincent in the British West Indies and two of its officers, Ronald W. Laird and Albert S. Pitts. Also named in the order are Risk Management Association Inc., a Nevada corporation based in Marietta, Georgia, and officers Richard H. Boyer and Douglas S. Crucet. The Texas Department of Insurance's Fraud Unit investigated Western Guarantee and its agent, Risk Management Association, after hospitals in Irving and Jasp er inquired about medical malpractice policies submitted by physicians seeking staff privileges. Six Texas doctors are known to have bought insurance from the company. None of the businesses and individuals named in the order is licensed or otherwise eligible to sell insurance in Texas. "Physicians and other practitioners should be careful when choosing medical malpractice insurance carriers," Bomer said. "The first step should be verification that the insurance company and agent are legally able to do business in Texas. If they're not, common sense should lead to the next question: Why would an insurer choose to operate outside the law?" Texans can verify that companies and agents are licensed or otherwise eligible by calling the Texas Department of Insurance, toll-free, at 1-800-252-3439. Bomer's cease-and-desist order cites the cases of two doctors who bought medical malpractice insurance from Western Guarantee and Assurance. One doctor has an annual premium of $3,600 per year; the other pays $2,432. Both premiums are well below those charged by licensed companies and eligible surplus lines carriers. Continue News Release Date:5/21/1998 Investigators have arrested two men and one juvenile in the burning of a predominantly African-American church on the Texas/Louisiana border. Timothy Wright, 22, and a 14-year-old juvenile were arrested at their residence Wednesday night in Waskom, Texas. Robbie Todd, 29, of Greenwood, La., was arrested late this afternoon at his residence. Wright is being held without bond in the Harrison County Jail in Marshall where he faces state ch arges of arson and a motion to revoke his probation. Todd is being held in Shreveport. Both men are expected to be taken to Tyler next week where they will face arraignment before a U.S. Magistrate on federal charges. The juvenile was released to his parents. Wright and Todd face several federal charges including arson to a church and possibly civil rights violations. The Waskom Volunteer Fire Department was called to the Gainesville Church of God in Christ located near the community of Waskom in Harrison County on the night of May 8. The church was destroyed. The State Fire Marshal's Office determined that gasoline was used to set the blaze. A tip to the Waskom Police Department and Harrison County Fire Marshal led to the arrests of the suspects. A joint investigation included officers with the Harrison County Sheriff's Department, Waskom Police Department, Harrison County Fire Marshal, Bureau of Alcohol, Tobacco and Firearms, the Federal Bureau of Investigation and State Fire Marshal's Office. The State Fire Marshal's Office became a part of the Texas Department of Insurance on September 1, 1997. Continue News Release Date:5/15/1998 LOCAL ANGLE FOR DALLAS AREA Insurance Commissioner Elton Bomer has ordered a Dallas-area man whose license was revoked in 1995 to stop selling life insurance for fraternal benefit societies. Bomer's cease and desist order is against Hugh Maxwell Roth, whose business address is The General Agency, 15851 Dallas Parkway, Suite 500 in Dallas. Roth lives in Plano. Roth has until May 28 to decide whether to appeal the order. Although fraternal benefit soc ieties are subject to only limited state regulation, state law prohibits persons whose insurance licenses have been revoked from soliciting any type of insurance business. On March 22, 1991, then Insurance Commissioner Philip W. Barnes revoked Roth's insurance licenses based on findings that Roth had violated insurance laws and had been guilty of dishonest practices. Roth appealed the order, however. The revocations didn't take effect until a judgment upheld the Commissioner's order on August 1, 1995, following a jury trial in Austin. Bomer's order said Roth entered into agent agreements with three fraternal life insurance companies between August 1995 and June 1996 and took 27 applications on their behalf. Continue News Release Date:5/15/1998 Insurance Commissioner Elton Bomer has increased the amount of wind and hail coverage that Texas coastal homeowners can buy from the Texas Windstorm Insurance Association ("Windpool"). The coverage had been limited to $355,000 per home, $1,551,000 for commercial buildings and $2,192,000 for public buildings. Bomer approved a reinsurance plan that may enable Windpool policyholders to eventually increase their wind and hail coverage to as much as $1 million for homes and $5 million for commercial and public buildings. However, the Windpool will initially limit the amount available to homes and its contents to $500,000 in order to provide additional insurance for more risks. Additional coverage will not be immediately available for commercial and public buildings. Coverage above the normal Windpool limits will be provided by syndicates of Lloyd's of Lon don. The expanded coverage for homes will be available beginning Monday, May 18. Until now, homeowners needing windstorm and hail insurance for more than $355,000 had to turn to surplus lines carriers for additional coverage or go without it. "This should help more than a thousand homeowners along the Texas coast who've had problems finding the necessary coverage to protect their property," Bomer said. The reinsurance will be limited to a total of $200 million for the coastal counties covered by the Windpool with a sub-limit of $25 million for any one county. The price to consumers obtaining the added coverage will include the cost of the reinsurance and the Windpool's administrative expenses. The Windpool provides wind and hail insurance in the 14 counties along the Gulf of Mexico and several Harris County communities on Galveston Bay. Continue News Release Date:5/14/1998 Texas Department of Insurance Fraud Unit investigators and officers from five other agencies have arrested three Houston residents as part of a joint undercover operation into allegedly fake medical billings through the Pasadena Medical Clinic. Law officers also seized the files of more than 30 clinic patients and other related papers from the clinic at 916 Harris in Pasadena and from the Houston law offices of Luis DeLeon, 5615 Harrisburg in Houston. The May 7 arrests concluded a six-month investigation into what was considered one of the state's "Top 20" insurance fraud cases. The investigation included the Texas Department of Insurance, the Texas Department of Public Safety, the Drug Enforcem ent Administration, FBI, Harris County District Attorney's Office and the National Insurance Crime Bureau. Arrested on second degree felony charges of engaging in organized criminal activity were Antonetti Jesse Galvan, 26, of 935 Hahlo in Houston; Rosa Maria Flores, 52, of 1206 Gober in Houston; and Homobono Compean Pulido, 38, of 1607 W. Hedrick in Houston. Pulido and Galvan, listed in Harris County records as owners of the clinic, also were charged with theft. Flores is listed as an employee of the Luis DeLeon law firm. Another arrest is pending. If convicted, the three could face prison terms of two to 20 years and fines not to exceed $10,000. Undercover agents were introduced to clinic officials as "victims" of traffic accidents. Even though the agents reported that they were not injured, clinic personnel billed their insurance companies for treatments they never received and even issued allegedly fake physical therapy forms and prescriptions for Vicodin and Valium, both controlled substances. The agents were told that even if they weren't hurt in an accident, they could still run up the medical bills. Billings in the name of one undercover agent totaled $10,000. Continue News Release Date:5/13/1998 Most drivers involved in "fender benders" causing less than $1,000 in auto repairs or less than $3,000 in medical expenses no longer would be subject to car insurance premium surcharges under a rule change proposed by the Texas Department of Insurance. TDI sent the proposal to the Texas Register late Tuesday for publication in the May 22 edition. Commissioner Elton Bomer will hold a hea ring on July 1, 1998, before deciding whether to adopt the rule change. The proposed rule change would apply only to rate-regulated insurance companies, which write about 70 percent of the Texas auto insurance market. It would not apply to county mutual insurers, which are exempt from rate regulation. At-fault drivers now are surcharged for accidents involving $500 or more in property damage and any bodily injury, no matter how slight. The normal surcharge for one accident is 15 percent of a county's lowest benchmark rate for liability, collision, personal injury protection (PIP) and medical payments insurance. Surcharges remain on a premium for three years. The present threshold has been in effect since 1985. "Since 1985, repair costs have increased significantly and the distribution of automobiles on the road has changed dramatically. Consequently, very minor damage can easily exceed $500," the TDI staff petition said. Staff said about the same proportion of claims fall below $1,000 today as fell below $500 in 1985. A similar proportion of bodily injury claims fall below $3,000. Continue News Release Date:5/13/1998 The Texas Department of Insurance will conduct a Property and Casualty Workshop on May 26, 1998, to update agents and insurance company personnel on compliance with Texas' insurance regulations and filing requirements. The workshop will be from 8:30 a.m. to 4 p.m. at the Joe C. Thompson Conference Center at 26th and Red River on the campus of the University of Texas at Austin. Registration can be made via the Internet at www.tdi.state.tx.us/consumer/pcwrkshp.html o r by calling Rose Churchill at 512-305-7463. The workshop will begin with a general session on recent legislation and be followed by four 55-minute sessions on particular topics conducted by TDI technical and professional staff. Those attending may choose among sessions on recent commercial lines legislation and rules, commercial lines "hot topics," electronic filing, recent personal lines legislation and rules, filing requirements, the ISO nationwide property rating program, TDI's complaint process, tort reform filing and closed claim reporting processes and workers' compensation. An "Ask the Regulator" session will provide an opportunity for specific questions about property and casualty insurance. The workshop ends with a demonstration of useful information for insurers on TDI's Internet home page. Continue News Release Date:5/4/1998 The state's fifth and 15th largest rate-regulated car insurers, the Southern Farm Bureau Group and the Amica Mutual Group, have agreed to rate reductions after negotiations with the Texas Department of Insurance. The reductions will take effect July 1. "Companies knew we were determined that rates should follow the downward trend of car insurance claim payments, so nobody should be surprised that we've looked hard at this year's rate filings," said Commissioner Elton Bomer. "I'm pleased that Southern Farm Bureau and Amica came to the table and negotiated rate agreements that are fair to their customers and fair to the companies." Amica Mutual Insurance Co., No. 15 in auto premiums among rate-regulated companies, lowered its rates by 12.5 percent after first filing a reduction of 6.5 percent. Amica writes only in the "preferred" market of drivers with clean driving records. Southern Farm Bureau, No. 5 in total car insurance premiums, cut rates by 6.25 percent for drivers in its "preferred" company, Southern Farm Bureau Casualty Insurance Co. The company originally filed a 4.25 percent reduction. The group's company for higher risk drivers, Texas Farm Bureau Underwriters, has proposed a 0.95 percent rate reduction after initially filing a 1.01 percent rate increase. Because the company's rates are outside the "flexibility band," TDI approval is required. TDI accepted the 6.82 percent reduction filed by the group's "standard" company, Texas Farm Bureau Mutual Insurance Co., so no changes were necessary. The reductions all are statewide averages. Actual rate changes will vary among the 52 rating territories and the various driver classifications used in determining car insurance premiums. The Southern Farm Bureau Group's 1997 Texas car insurance premiums totaled $260.9 million (all three companies combined). Amica's totaled $40.3 million. Insurance companies filed their new auto rates between January 20 and February 19 after Bomer lowered private passenger auto benchmark rates by 5 percent. Companies may file and immediately use new rates without TDI's prior approval if they fall within a range of 30 percent above or below the benchmarks. TDI, however, reviews the filings and can formally reject them after holding a public hearing. Companies whose rates are challenged by Department staff may, however, agree to negotiate the differences and revise their rate filings rather than force a hearing. Continue News Release Date:4/30/1998 In a move that will save employers millions of dollars, Commissioner Elton Bomer today canceled this year's levy of a tax dedicated to retiring the state bonds that launched the Texas Workers' Compensation Insurance Fund. Bomer reduced to zero the previously approved 0.763 percent maintenance tax surcharge on all workers' compensation insurance carriers, including the Fund. The tax is levied annually as a percentage of an insurer's workers' compensation premiums for the previous year. Most -- but not all -- insurers recoup the tax from their customers. Bomer's decision to cancel the 1998 levy means they won't be adding it to employers' premiums this year. Bomer will decide later whether a levy will be needed in 1999. "Because of financially responsible actions taken by the Fund's board of directors to prepay part of the bonds from the Fund's past earnings, the tax isn't necessary this year," Bomer said. "It's always a pleasure to give back a tax -- particularly this one because it means savings for employers through lower workers' compensation costs." The decision benefits employers with policies effective between June 1, 1998, and May 31, 1999. Insurers had a March 1, 1998, deadline to pay the "maintenance tax surcharge." Refunds to the insurers will total $22.7 million, according to the Comptroller of Public Accounts. The Fund, now the state's largest workers' compensation insurer with 16 percent of the total market, was started by the 1991 Legislature. To raise the necessary start-up capital, the Legislature approved a $300 million bond issue and imposed the maintenance tax surcharge on all workers' comp insurers to service the debt. The Commissioner of Insurance each year determines the surcharge in an amount sufficient to pay that year's required debt service. Bomer was able to cancel this year's maintenance tax surcharge because the Fund itself prepaid $73.8 million of principal and interest from retained earnings. Besides offering workers' compensation insurance at competitive rates in the regular market, the Fund also is the insurer of last resort for employers that other insurers won't cover, including many small employers with annual premium of $5,000 or less. The Fund's policy-making body is a board of directors appointed by the Governor from business people whose firms are customers of the Fund. All of the present board members are appointees of Governor George W. Bush. "The Fund has helped lower employers' costs in the workers' compensation system in Texas since 1992," said board Chairman Martin H. Young Jr. of Houston. "Helping reduce the bonds and the surcharge are more steps we wanted to take, because reducing the bond debt makes the system more affordable for Texas employers, and that also helps our economy. We believe these actions support the desire of Governor Bush and the Legislature to lower workers' compensation costs." Continue News Release Date:4/29/1998 Commissioner Elton Bomer today agreed to allow two Farmers Insurance companies to offer new homeowners insurance customers an actual cash value endorsement for roofs instead of the standard replacement-cost policy. Texas is one of the last states to offer actual cash value endorsements for roofs. At an April 9 information-gathering hearing held by Bomer, Farmers agents testified that offering actual cash value for roofs would increase the availability of homeowners insurance. Farmers has not sold residential property insurance to new homeowners in parts of the D/FW area since the summer of 1995 because of huge losses suffered in that year's hailstorms. Farmers agents testified that the actual cash value endorsement would allow them to re-enter the marketplace and reduce premiums. Bomer said an actual cash value policy endorsement must be accompanied by a reasonable premium credit. Bomer put several other limitations on the actual cash value coverage, including:
Bomer said the limitations placed on actual cash value would act as a safeguard to consumers. "While this new endorsement will hopefully increase the availability of insurance in hard-hit areas, consumers should know that much of the financial responsibility for replacing an older roof would be placed on them," Bomer said. "Homeowners who prefer the standard replacement policy should shop around before accepting an actual cash value endorsement." Farmers agents should explain the difference between actual cash value and standard replacement policies and describe the insurer's policy for roof depreciation and reimbursement, the Commissioner said. "This is simply another option for consumers that they didn't have," Bomer said. "Actual cash value endorsements will bring down premiums for those who can afford to share the risk." The actual cash value endorsements may be used immediately by Farmers companies exempt from rate regulation, which are Farmers Insurance Exchange and Fire Insurance Exchange. Other companies wanting to offer actual cash value policies must submit their own requests to the Texas Department of Insurance for approval. Continue News Release Date:4/22/1998 Texas Department of Insurance engineers and windstorm inspectors will offer a one-day seminar in Beaumont on the state's new building code on Wednesday, April 22. New dates for Corpus Christi and Galveston have been set. The Beaumont seminar will take place at the Hilton Hotel, 2355 IH 10, from 8 a.m. to 5 p.m. The training sessions are free, but participants must provide their own copy of the Building Code for Windstorm Resistant Construction. The building code booklet is a part of a windstorm construction document package that participants can purchase at each seminar for $72. The seminar is aimed at builders, contractors and architects. Course topics include: limitations, foundations, wood stud wall framing, uplift connections, framing around openings, wall bracing, ceiling framing, roof framing, roof coverings, door and windows, exterior coverings and awnings and overhangs. Two one-day seminars will be offered in Corpus Christi on April 28 and 29 at the Omni Bayfront, 900 North Shoreline. A one-day seminar will be offered in Galveston on May 12 at the Galveston Island Hilton, 5400 Seawall Blvd. The new building code for windstorm resistant construction takes effect June 1. Continue News Release Date:4/21/1998 Insurance Commissioner Elton Bomer warned Texans today not to get complacent about the absence of tornadoes and other severe weather this spring. "As we know it doesn't take long for Texas weather to change, so I warn all Texans to be adequately insured if a destructive storm were to strike," Bomer said. Because of El Nino, this year's destructive storms have mostly bypassed Texas while causing massive destruction and loss of lives in the southeastern United States. Texas usually records more tornadoes than any other state, but not this year. Residents of Florida, Alabama, Tennessee and Arkansas have seen many more tornadoes and costly damage from recent storms. Thunderstorms in these four states have resulted in property damage totaling hundreds of millions of dollars and 99 fatalities. Destruction due to storms in Texas so far this year has been minimal, and there have been no fatalities. The peak of the storm season in Texas occurs in May, which on average results in 38 tornadoes. Bomer advised consumers to prepare for possible storms by:
Continue News Release Date:4/2/1998 Agents with the State Fire Marshal's Office and Alcohol, Tobacco and Firearms arrested a 31-year-old suspect today and charged him with deliberately setting fire to the Freedom Fellowship Church near New Boston in Northeast Texas. The church, a multi-racial congregation, was destroyed by fire Saturday. Jerry Todd Upson was arraigned before Federal Magistrate Judith Guthrie in Tyler. Upson faced charges of violation of federal arson statutes. Upson could receive up to 20 years in federal prison if convicted. Firefighters from the New Boston and Sims Volunteer Fire Departments responded to the church fire just outside the community of New Boston about 2:45 a.m. Saturday. State Fire Marshal investigators quickly determined that gasoline was used to start the fire. Upson, who lives only a quarter of a mile from the church, was arrested at his residence without incident. Investigators said Upson broke a church window and poured gasoline inside before setting it on fire. Investigators say other arrests may be forthcoming. The joint investigation included officers with the Bowie County Sheriff's Department, Alcohol, Tobacco and Firearms and State Fire Marshals Office. The State Fire Marshals Office became a part of the Texas Department of Insurance on September 1, 1997. Continue News Release Date:3/25/1998 Farmers Insurance Group agreed today to refund excess premiums paid by about 8,000 Texans who allegedly were overcharged for car insurance because they did not meet Farmers' prior insurance requirements. Commissioner Elton Bomer and officials of the Farmers Insurance Group signed a consent order that Texas Department of Insurance (TDI) staff attorneys said would return more than $500,000 to consumers. "This order brings full restitution to people who were Farmers policyholders for at least 90 days and overpaid because of the prior insurance requirement," Bomer said. "This order is a good deal for those consumers because they get back 100 percent of their overpayments." In consenting to the restitution, Farmers denied violating Texas insurance laws. Because of the consent order, TDI attorneys asked the State Office of Administrative Hearings to cancel a scheduled April 1, 1998, hearing on allegations that Farmers had violated TDI's "no prior" rule. The rule prohibits insurance companies from considering applicants' lack of prior insurance in determining their automobile liability premiums unless they have driven without insurance in Texas for more than 30 days out of the preceding 12 months. Beneficiaries of this rule include people who had no cars and, therefore, no car insurance before moving to Texas, newly licensed drivers and people who previously had relied on public transportation. The consent order names Texas Farmers Insurance Co., Mid-Ce ntury Insurance Company of Texas and Farmers Texas County Mutual Insurance Co. Like many insurance groups, Farmers assigns policyholders to one of several companies based on their perceived risk of having accidents and claims. In Texas, Farmers assigns "preferred" customers to Mid-Century, "standard" customers to Texas Farmers and "high risk" customers to Farmers Texas County Mutual. From July 24, 1996, to January 27, 1997, Farmers used underwriting guidelines that required three consecutive years of prior insurance to qualify for its lowest rates and two consecutive years to receive its next-best "standard" rates. Drivers with less than two years of insurance when they applied for coverage automatically were placed in Farmers County Mutual, at the group's highest rates. Included in this group were people who had not driven without insurance in Texas for more than 30 days out of the preceding 12 months. Full restitution will consist of the difference between what these drivers were charged and what they would have paid in the absence of the underwriting guidelines that TDI alleged conflicted with the "no prior" rule. Customers that had full-term policies of six months or more, and customers whose policies were cancelled -- either by them or by Farmers -- after at least 90 days of coverage will receive full refunds without the need for any action on their part. Another group affected by the "no prior insurance" underwriting guideline consists of Farmers County Mutual customers who might have been upgraded to cheaper standard or preferred policies had the guidelines not been in effect. The consent order entitles them to refunds, too. Farmers agreed to send its agents a bulletin directing them to identify customers who would have received upgrades if the "no prior insurance" underwriting guideline had not been in effect. If any current or former customers believe they might be entitled to the upgrade benefit, th ey are encouraged to notify their Farmers agents or contact TDI through the Department's web site, www.tdi.state.tx.us, or at the following mailing address for details: Texas Department of Insurance Continue News Release Date:3/18/1998 A 21-month investigation into fires at an elementary school in Pleasanton have led to grand jury indictments against three suspects. Two of the suspects are in custody. An Atascosa County grand jury returned 20 felony indictments Monday against Matthew Rodriguez,18, Anthony Romero, 22, and Paco Romero, 29, of Pleasanton. Rodriguez and Anthony Romero were arrested February 18 and placed in the Atascosa County Jail. Rodriguez is being held under $500,000 bond, and Anthony Romero is being held under $300,000 bond. Paco Romero was arrested Tuesday and has been released from Atascosa County Jail after posting a $30,000 bond. A 16-year-old juvenile female also was arrested February 18. She was placed in the Atascosa County Juvenile Detention Center in Jourdanton and has since been released. Rodriguez and Anthony Romero have been charged with setting fire to the Pleasanton Elementary School on June 4, 1996, and on October 27, 1996. The fires destroyed the school's art and music buildings. Investigators say both facilities also were burglarized. The State Fire Marshal's Office determined that gasoline and other combustibles were used to start the fires. State Fire Marshal investigator Thomas B. Sing says the three suspects are charged with setting a car on fire November 27, 1997, and Rodriguez and Anthony Romero also have been charged with setting fire to a Pleasanton residence November 28, 1997. The vehicle was destroyed and the house sustained heavy damage. Rodriguez was charged with three first-degree felony counts of organ ized criminal activity/arson, four second-degree counts of arson, two second-degree felony counts of burglary/habitation and two third-degree felony counts of burglary/building. Anthony Romero was charged with two first-degree felony counts of organized criminal activity/arson, two second-degree felony counts of arson, one second-degree felony count of organized criminal activity/burglary and one third-degree felony count of burglary/building. Paco Romero was charged with one first-degree felony count of organized criminal activity/arson and one second-degree felony count of arson. Organized criminal activity indictments are possible when two or more people engage in the same criminal activity and continue to commit crimes. The Pleasanton Police Department requested assistance from the State Fire Marshal's Office on June 5, 1996. Pleasanton police Lt. John Eric Rutherford and State Fire Marshal investigator Sing presented the case to the Astascosa County grand jury which returned the indictments. The State Fire Marshal's Office became a part of the Texas Department of Insurance on September 1, 1997. Continue News Release Date:3/15/1998 HOMEOWNERS
The chart below lists discounts available for all four roof cover classifications for all territories under a dwelling insurance policy. DWELLING/EXTENDED COVERAGE
Continue News Release Date:3/13/1998 The Texas Department of Insurance (TDI) is looking for printing and computer technology information services vendors, especially historically underutilized businesses (HUBs), as well as firms providing various professional services, such as accounting, business analysist, claims and legal services. To help recruit the new vendors, TDI is sponsoring a "Business Opportunities Fair" on Thursday, March 26. The fair runs from 9:30 a.m. to noon in Room 100 of the William P. Hobby State Office Building, 333 Guadalupe, in Austin. The program includes information on the states bid process and TDIs purchasing needs. In addition, staff will announce upcoming bid opportunities and provide additional information on the HUB vendor program. Qualified HUB vendors include businesses owned by minorities and women. For more information, e-mail Joyce.Bertolacini@tdi.state.tx.us or call Regina Durden at 512-463-6174. Register for the fair on-line at TDIs web site (www.tdi.state.tx.us/general/aspurch.html#1998). For more information, e-mail consumerprotection@tdi.state.tx.us or call Regina Durden at 512-463-6174. Register for the fair on-line at TDIs web site (www.tdi.state.tx.us/consumer/hub.html). Continue News Release Date:3/12/1998 Two suspects facing grand jury indictments for setting fire to two Corpus Christi churches were arrested this afternoon at a south side residence in Corpus Christi. Tommy Jimenez, 23, and Michele Ann Scott Jimenez, 23, were taken into custody by state and federal investigators. Both have been placed in the Nueces County Jail and were awaiting bond. A federal grand jury indicted the pair along with Ramsey Leal, 24, late Wednesday on charges of damaging church buildings by means of fire, using fire to commit conspiracy and intentionally defacing religious property. Leal is in custody in the Texas Department of Criminal Justice prison facility in Beeville on an unrelated charge of burglary. The three have been accused of setting fire to the McArdle Road Baptist Church, 4444 McArdle, and the Abiding Savior Lutheran Church, 4326 McArdle. Corpus Christi fire fighters were called to the Abiding Savior Lutheran Church early Halloween morning, October 31, 1997. The church's fellowship hall received extensive damage from fire. Within an hour of the first blaze, fire fighters were called to the McArdle Road Baptist Church, just two-and-half blocks away. Gasoline poured around the front door of the church had been ignited, but only minimum damage occurred. Suspects had defaced the outside of the church by spray painting Satantic symbols and smearing blood from a decapitated cat. The Corpus Christi Fire Department called in the State Fire Marshal's Office to assist in the arson investigation. Investigators with the Alcohol, Tobacco and Firearms, along with the Federal Bureau of Investigation, assisted in tracking suspects in the case, which resulted in the grand jury indictments and today's arrests. The entire operation was a cooperative investigation involving the Corpus Christi police department and fire department, the State Fire Marshal's Office, Alcohol, Tobacco and Firearms, the Federal Bureau of Investigation and the U.S. Secret Se rvice. If convicted, each faces maximum fines of $250,000 and 20 years in prison. Continue News Release Date:3/12/1998 List of 75 communities The Texas Department of Insurance has negotiated an agreement that will hold down homeowners rate increases in 75 communities that are awaiting an evaluation of their fire-protection capabilities by the Insurance Services Office (ISO). The Department is notifying community officials that their temporary fire protection classifications will be better than those previously assigned by ISO. ISO made the agreement in response to Insurance Commissioner Elton Bomer's February 19 letter asking ISO for actions to soften any adverse effects of a change in the system for rating local fire protection on certain communities that formerly piggy-backed on the rates of nearby cities. ISO also agreed to bring in out-of-state inspectors, if necessary, to assure that these communities are surveyed promptly and receive a rating that accurately reflects the quality of their fire protection. Under the agreement, ISO will improve the 75 communities' temporary "Public Protection Classification" ratings by two points, from "9" to "7" on a scale of 1 (best) to 10 (worst). The assignment of the class "7" to these communities, pending inspections, is based on information that the communities have a responding fire department and a water distribution system with fire hydrants. As a result, homeowners rates for frame houses in those communities will be 29 percent lower and rates for brick veneer houses will be 6.5 percent lower than t hey otherwise would have been. These percentages apply only to homes insured by rate-regulated insurance companies. Companies not subject to rate regulation are free to apply different factors reflecting fire protection and type of construction. All 75 communities are in rural or suburban areas that previously benefited from a "fringe" rule used under the obsolete "key rating system." That rule allowed homeowners in small communities to benefit from the fire protection rating of any city within five miles of their boundaries, so long as a house was within 1,000 feet of a fire hydrant. Effective February 1, 1998, Bomer discontinued the "key rating system" in favor of ISO's more up-to-date Public Protection Class (PPC) system. All other states already used the PPC system. "It was important to move Texas to a modern rating system," Bomer said today. "And I appreciate ISO taking steps to help relieve some of the pain and problems that inevitably result from such a massive change." The new rating system requires all communities to be graded solely on their own fire protection abilities. The 75 communities had returned questionnaires to ISO and received automatic "9" ratings pending on-site surveys by ISO field representatives. Bomer previously had capped homeowners rate changes resulting from the change in fire protection grading systems at 10 percent for the first year and 21 percent for the second year. Continue News Release Date:3/12/1998 Here are the 75 communities (later increased to 88) whose temporary PPC ratings were reduced under an agreement between the Texas Department of Insurance and the Insurance Services Office. (See news release dated March 12, 1998.) GRADED AREA NAME COUNTY* ACTON HOOD APPLEBY VFD NACOGDOCHES BARTONVILLE DENTON BEVIL OAKS VFD JEFFERSON BOLING VFD WHARTON BRIAROAKS JOHNSON BUFFALO GAP TAYLOR CHAPEL HILL FD SMITH CHINA SPRINGS VFD MCLENNAN CLEAR LAKE SHORES GALVESTON COMBINE VFD DALLAS COMMUNITY VFD FORT BEND COPPER CANYON DENTON CRYSTAL BEACH VFD GALVESTON CUT N SHOOT MONTGOMERY DALWORTHINGTON GARDENS TARRANT DCBE/ACTON VFD HOOD EAGLE MOUNTAIN VFD TARRANT EASTEX FREEWAY VFD HARRIS EL LAGO HARRIS FABENS EL PASO FRUITVALE VAN ZANDT GERONIMO GUADALUPE GLENN HEIGHTS VFD DALLAS HEATH ROCKWALL HELOTES AREA VFD BEXAR HOWE GRAYSON HUTTO WILLIAMSON INDIAN HARBOR VFD HOOD IVANHOE VFD FANNIN JAMAICA BEACH GALVESTON KEMPNER VFD LAMPASAS KRUM DENTON LACOSTE VFD MEDINA LAGO VISTA VFD TRAVIS LAGUNA HEIGHTS CAMERON LAGUNA VISTA CAMERON LAKESIDE VILLAGE AREA VFD ARCHER LAKEWOOD VILLAGE DENTON LEANDER WILLIAMSON LILLIAN JOHNSON LITTLE ELM FIRE DEPT DENTON LIVERPOOL VFD BRAZORIA LUCAS COLLIN LYFORD WILLACY MAGNOLIA VFD MONTGOMERY MANCHACA VFD TRAVIS MANOR TRAVIS MARKHAM MATAGORDA MAXWELL CALDWELL MISSION BEND FORT BEND MORGAN'S POINT HARRIS MURPHY COLLIN NATALIA VFD MEDINA NEVADA VFD COLLIN NORTHEAST FIRE & RESCUE HARRIS NORTHEAST FORT BEND VFD FORT BEND OAK HILL TRAVIS OAK HILL FIRE DEPT TRAVIS OLD OCEAN BRAZORIA ORCHARD FORT BEND OVILLA ELLIS OVILLA FIRE DEPT ELLIS PANORAMA VILLAGE MONTGOMERY PARKER COLLIN PECAN GROVE FORT BEND PENITAS HIDALGO POINT COMFORT CALHOUN POINT VENTURE TRAVIS PORTER MONTGOMERY POTTSBORO GRAYSON PROSPER VFD COLLIN RIO HONDO CAMERON ROBINSON VFD MCLENNAN SAN FELIPE/ FRYDEK VFD AUSTIN SAN LEON GALVESTON SHAVANO PARK BEXAR SHAVANO PARK FIRE DEPT BEXAR SHELDON HARRIS SHORE ACRES HARRIS TAYLOR LAKE VILLAGE HARRIS TIOGA GRAYSON TOOL HENDERSON TROY VFD BELL TYE VFD TAYLOR WALDEN VFD MONTGOMERY WARREN CITY GREGG WINONA VFD SMITH * (May extend into other counties.) GRADED AREA NAME COUNTY Archer LAKESIDE VILLAGE AREA VFD ARCHER Austin SAN FELIPE/ FRYDEK VFD AUSTIN Bell TROY VFD BELL Bexar HELOTES AREA VFD BEXAR SHAVANO PARK BEXAS SHAVANO PARK FIRE DEPT BEXAR Brazoria LIVERPOOL VFD BRAZORIA OLD OCEAN BRAZORIA Caldwell MAXWELL CALDWELL Calhoun POINT COMFORT CALHOUN Cameron LAGUNA HEIGHTS CAMERON LAGUNA VISTA CAMERON RIO HONDO CAMERON Collin LUCAS COLLIN MURPHY COLLIN NEVADA VFD COLLIN PARKER COLLIN PROSPER VFD COLLIN Dallas COMBINE VFD DALLAS GLENN HEIGHTS VFD DALLAS Denton BARTONVILLE DENTON COPPER CANYON DENTON KRUM DENTON LAKEWOOD VILLAGE DENTON LITTLE ELM FIRE DEPT DENTON Ellis OVILLA ELLIS OVILLA FIRE DEPT ELLIS El Paso FABENS EL PASO Fannin IVANHOE VFD FANNIN Fort Bend COMMUNITY FORT BEND MISSION BEND FORT BEND NORTHEAST FORT BEND VFD FORT BEND ORCHARD FORT BEND PECAN GROVE FORT BEND Galveston CLEAR LAKE SHORES GALVESTON CRYSTAL BEACH VFD GALVESTON JAMAICA BEACH GALVESTON SAN LEON GALVESTON Grayson HOWE GRAYSON POTTSBORO GRAYSON TIOGA GRAYSON Gregg WARREN CITY GREGG Guadalupe GERONIMO GUADALUPE Harris EASTEX FREEWAY VFD HARRIS EL LAGO HARRIS MORGAN'S POINT HARRIS NORTHEAST FIRE & RESCUE HARRIS SHELDON HARRIS SHORE ACRES HARRIS TAYLOR LAKE VILLAGE HARRIS Henderson TOOL HENDERSON Hidalgo PENITAS HIDALGO Hood ACTON HOOD DCBE/ACTON VFD HOOD INDIAN HARBOR VFD HOOD Jefferson BEVIL OAKS VFD JEFFERSON Johnson BRIAROAKS JOHNSON LILLIAN JOHNSON Lampasas KEMPNER VFD LAMPASAS Matagorda MARKHAM MATAGORDA McClennan CHINA SPRINGS VFD MCLENNAN ROBINSON VFD MCLENNAN Medina LACOSTE VFD MEDINA NATALIA VFD MEDINA Montgomery CUT N SHOOT MONTGOMERY MAGNOLIA VFD MONTGOMERY PANORAMA VILLAGE MONTGOMERY PORTER MONTGOMERY WALDEN VFD MONTGOMERY Nacogdoches APPLEBY VFD NACOGDOCHES Rockwall HEATH ROCKWALL Smith CHAPEL HILL FD SMITH WINONA VFD SMITH Tarrant DALWORTHINGTON GARDENS TARRANT EAGLE MOUNTAIN VFD TARRANT Taylor BUFFALO GAP TAYLOR TYE VFD TAYLOR Travis LAGO VISTA VFD TRAVIS MANCHACA VFD TRAVIS MANOR TRAVIS OAK HILL TRAVIS OAK HILL FIRE DEPT TRAVIS POINT VENTURE TRAVIS Van Zandt FRUITVALE VAN ZANDT Wharton BOLING VFD WHARTON Willacy LYFORD WILLACY Williamson HUTTO WILLIAMSON LEANDER WILLIAMSON Continue News Release Date:3/11/1998 The president of the Bethsaida Medical Clinic in Houston along with the facility's billing clerk have been arrested in connection with a staged automobile accident scheme. The arrests followed Harris County grand jury indictments returned February 27 based on a sting operation. John Adi, 47, president of the Bethsaida Medical Clinic, 6633 Hillcroft, was arrested in an attorney's office Monday afternoon by Harris County District Attorney investigators. Denise Henry, 27, a billing clerk at Bethsaida, surrendered to authorities on March 2. Adi and Henry have been charged with second degree felony organized criminal activity. Reginald C. Ike, an attorney with offices at 3838 Hillcroft, also was indicted by the Harris County Grand Jury for organized criminal activity. Ike was arrested at his law office on January 29 and was released from custody after posting $20,000 bond. If convicted, the three could face a maximum of $10,000 in fines and 20 years in prison. Texas Department of Insurance Fraud investigators posed as clients advising Ike they had staged an accident and were not in the vehicles nor were injured. Ike referred them to the Bethsaida Medical clinic for treatment. Bethsaida billed insurance companies for services not rendered. Adi and Henry were in the Harris County jail on Wednesday under $80,000 bond. Continue News Release Date:3/3/1998 The State Fire Marshal's Office (SFMO) put its new fire/arson response vehicle to good use during its first week of operation. The custom-built fire unit was sent two weeks ago to a fatal fire believed to be arson outside Buda in Central Texas and at the site of a massive fire and explosion at a manufacturing facility near Natalia in South Texas. For a break in the action SFMO officials brought the vehicle to the State Capitol today, where Governor George W. Bush got a chance to inspect the truck. Funding for the fire/arson response vehicle came from the Office of the Governor, Criminal Justice Division, with matching funds from the Texas Commission on Fire Protection. The vehicle is equipped with state-of-the-art communication facilities, room for investigators to conduct interviews and extra generators to provide non-stop operation capabilities at fire scenes. State Fire Marshal G. Mike Davis said the fire/arson response vehicle will greatly enhance the effectiveness of arson investigators. "This will give our arson investigators the tools they need to conduct thorough investigations and provide quick responses to local fire departments anywhere in the state," Davis said. Upon request, SFMO arson investigators assist local fire departments in the investigation of fires and when arson is determined, assist in the arrest of suspected arsonists. The SFMO became a part of the Texas Department of Insurance on September 1, 1997. Continue News Release Date:3/1/1998 Agents with the State Fire Marshal's Office and Alcohol, Tobacco and Firearms arrested a 31-year-old suspect today and charged him with deliberately setting fire to the Freedom Fellowship Church near New Boston in Northeast Texas. The church, a multi-racial congregation, was destroyed by fire Saturday. Jerry Todd Upson was arraigned before Federal Magistrate Judith Guthrie in Tyler. Upson faced charges of violation of federal arson statutes. Upson could receive up to 20 years in federal prison if convicted. Firefighters from the New Boston and Sims Volunteer Fire Departments responded to the church fire just outside the community of New Boston about 2:45 a.m. Saturday. State Fire Marshal investigators quickly determined that gasoline was used to start the fire. Upson, who lives only a quarter of a mile from the church, was arrested at his residence without incident. Investigators said Upson broke a church window and poured gasoline inside before setting it on fire. Investigators say other arrests may be forthcoming. The joint investigation included officers with the Bowie County Sheriff's Department, Alcohol, Tobacco and Firearms and State Fire Marshals Office. The State Fire Marshals Office became a part of the Texas Department of Insurance on September 1, 1997. Continue News Release Date:2/27/1998 The Texas Department of Insurance is now offering severe weather preparedness information on its Internet web site. TDI's new StormLink includes preparedness material, historical data, related Internet links and graphics on tornadoes, flooding and other severe weather. StormLink is a follow-up to last year's addition of HurricaneLink to TDI's web site at www.tdi.state.tx.us. "This year, take time to prepare for severe weather. Don't put it off. Check out StormLink on TDI's web site, " Insurance Commissioner Elton Bomer said. Those without access to the Internet may order brochures and other severe weather preparedness materials by calling TDI toll-free at 1-800-599-7467. Some of the brochures available include: Tornado Alert, Thunderstorms, Floods: How to Protect Yourself, Hurricane Warnings, Wildfire Warnings and When Disaster Strikes: Consumer Claim Tips. For many Texans, March marks the return of some of the best and worst weather the state has to offer. Temperatures are mild, but spring storms can bring damaging winds, hail, flash floods and tornadoes. Although twisters have been reported in every month of the year in Texas, that number climbs dramatically from March through June, with May producing much of the state's most damaging severe weather. To help make the public aware of the dangers of severe weather, the state's Division of Emergency Management is working with the National Weather Service and others to publicize the first week in March as Severe Weather Awareness Week in Texas. Links to these and other weather-related web sites are available on TDI's StormLink. In case of severe weather, here are some basic "disaster claim tips" to keep in mind:
Continue News Release Date:2/26/1998 The Texas Department of Insurance will conduct a Licensing Workshop on March 25, 1998, to update agents and insurance company personnel on a number of licensing issues, including the NAIC Producer Database. The workshop will be from 8:30 a.m. to 4:30 p.m. at the Joe C. Thompson Conference Center at 26th and Red River on the campus of the University of Texas at Austin. Registration information may be obtained from TDI's website, www.tdi.state.tx.us, or by calling the Licensing Group at 512-305-7286. The workshop will address current issues affecting resident and non-resident licensing administrators and insurance professionals. A highlight will be demonstrations of the NAIC Producer Database. The agenda will include a presentation from TDI's testing contractor, Insurance Testing Corporation, on license examinations and discussions of licensing procedures and company appointment procedures. Suggestions for other topics may be e-mailed to License@tdi.state.tx.us, faxed to 512 475-1819 or mailed to: Texas Department of Insurance Continue News Release Date:2/20/1998 3-Disc Ceiling Unit  Larger Version3-Disc Wall-Mount Sprinkler Design  Larger Version
No Problems Reported with Traditional Design Traditional Design  Larger Version
NOTE: If you need a copy of these "jpeg" images, use your mouse and right-click on each -- one at a time. A menu box will appear, allowing you to save them to your computer. Continue News Release Date:2/20/1998 The first of 14 training seminars on the state's new building code will take place in San Benito on Wednesday, February 25. The one-day seminar will be held from 8 a.m. until 5 p.m. at the San Benito Community Center, 210 E. Haywood, and will be repeated on Thursday, February 26. Engineers and windstorm inspectors with the Texas Department of Insurance (TDI) will offer an overview of the new building code for windstorm resistant construction, which takes effect June 1. Course topics include: limitations, foundations, wood stud wall framing, uplift connections, framing around openings, wall bracing, ceiling framing, roof framing, roof coverings, doors and windows, exterior coverings and awning and overhangs. The training sessions are free, but participants must provide their own copy of the Building Code for Windstorm Resistant Construction. The building code booklet is a part of a windstorm construction document package that participants can order from TDI for $72. While the seminars are aimed at builders, contractors and architects, the sessions are open to the public. The one-day seminars also will be held later in Corpus Christi, Victoria, Galveston and Beaumont. Continue News Release Date:2/20/1998 Note to Radio Stations Warning: Sprinkler Heads May Not Operate Suggested Intro: Insurance Commissioner Elton Bomer warns that some sprinkler heads in a widely used sprinkler system might not work in the event of a fire. Mark Hanna has the story. Text: In question is the reliability of the Omega sprinkler head, manufactured by the Central Sprinkler Company of Lansdale, Pennsylvania and installed in buildings across the country since 1982. . So far, six fires have been reported where the Omega sprinkler system failed to work properly. No fire-related deaths have occurred. The Consumer Products Safety Commission has discussed a possible recall of the product, but so far, no action has been taken. The State Fire Marshal's Office, a division of the Texas Department of Insurance, has called on the state's 200 sprinkler contractors to provide information on where the sprinkler systems are located in Texas. Both Central Sprinkler Company and Underwriters Laboratories say they will conduct free tests on Omega sprinkler heads submitted for inspections. Mark Hanna, Austin. Sound bites from Commissioner Bomer "A potentially dangerous situation exists." "Facilities with the Omega sprinkler system should consider adding security personnel and extra fire extinguishers and should test their sprinkler heads to ensure they are functional." Continue News Release Date:2/20/1998 Texas Insurance Commissioner Elton Bomer warned today that some sprinkler heads in a widely used sprinkler system might not work in the event of a fire. At issue is the reliability of the Omega sprinkler head, manufactured by Central Sprinkler Co. of Lansdale, Pa., and installed in buildings constructed across the country since 1982, including schools, hospitals and office buildings. Six fires have been reported where the Omega sprinkler system failed to work properly.
Building owners can call Underwriters Laboratories at 1-800-758-1794 or Central Sprinkler Company at 1-800-63 8-1531 for information on testing possibly defective Omega sprinkler heads. Suggested sound bites: Sprinkler contractors, building owners and fire department inspectors. "Think Visuals" is an attempt by the Public Information Office of the Texas Department of Insurance to turn complex but important insurance issues into visually appealing stories for your viewers. If you find this helpful or if you have any suggestions, call, fax or e-mail us. Continue News Release Date:2/19/1998 Commissioner Elton Bomer today urged an insurance industry group to take special steps that could minimize suburban and rural homeowners' rate increases resulting from the start-up of a new system for grading fire protection. Bomer sent a letter to the Insurance Services Office (ISO), which grades local fire protection for insurance rating purposes. He urged ISO "to make every possible effort, including reassigning out-of-state personnel to Texas, to keep the problems caused by changes in rating schedules to the very minimum." February 1, 1998, was the effective date of a major change in how Texas property insurance rates reflect differences in local firefighting capabilities. Bomer discontinued Texas' obsolete "key rating system," in favor of ISO's more up-to-date Public Protection Class (PPC) system. All other states use the PPC system. Bomer capped for two years any rate changes caused by the shift from key rating to the PPC system. The changes are designed to be revenue neutral in each of the 23 rating territories. The biggest rate impact of the change will be on hundreds of "unprotected" rural and suburban communities that benefited from the key rate system's "fringe" rule. In simplest terms, such communities received the key rate of better-protected neighboring cities up to five miles away. The new rating system requires these communities and rural areas to be graded based on their existing fire protection, but a number of then have never received an ISO inspection. Without an ISO inspection, a community receives a Public Protection Class rating of 9 or 10, the worst in terms of its effect on insurance rates. Some of these communities plan to improve their fire protection in order to get a better PPC grade and, with it, lower insurance rates. In addition, some communities have outdated ratings that do not reflect upgrades in their fire protection. It is important that ISO focus on grading communities that are improving and upgrading their fire protection capabilities to earn lower insurance costs. There have been reports, however, that ISO will need as much as a year to get to communities requesting inspections. Besides suggesting the possibility of bringing in ISO inspectors from other states, Bomer proposed that ISO establish a "temporary shortcut" for issuing PPC ratings more quickly. "I believe it is important to get a correct PPC applied quickly to a community to eliminate the paying of higher premiums based on an out-of-date PPC grading," he said. Continue News Release Date:2/12/1998 A state fire marshal's investigation into a suspicious fire in a predominantly Hispanic church in Castroville has lead to the arrest of two suspects. Aaron Freeman Holt, 19, and Jason Lee Jones, 22, were arrested Wednesday, February 10, based on Medina County grand jury indictments. They are charged with intentionally burning a place of worship, a first-degree felony, and were being held Thursday under $30,000 each bond in the Medina County Jail. The Medina Fire Department responded to a report of a fire at the Primera Iglesia Bautista Hispana early Wednesday, January 21. The State Fire Marshals Office (SFMO) was asked to investigate the cause of the blaze. SFMO Deputy Tommy Sing and Special Agent Marshal Littleton of the Bureau of Alcohol, Tobacco and Firearms determined the fire was intentionally set. Their investigation led to the questioning of suspects Holt and Jones, and one of the men gave a statement about the fire. Investigators say gasoline was used to set fire to a playground fence, a church wall and door. Quick action by firefighters kept the damage to a minimum. The two suspects are believed to have been the first to report the fire. State Fire Marshal G. Mike Davis praised the work of Deputy Sing and Agent Littleton. "Both men worked as a team in quickly determining the cause of the fire and joined local investigators in making the arrests," Davis said. Davis said the suspects would be tried under a new law passed by the Legislature that increased the penalty for setting fire to a church. "What used to be a second-degree felony that carried a 2-to-20-year prison sentence is now a first-degree felony which carries a 5-to-99-year sentence and up to a $10,000 fine," Davis said. At the time of their arrests both suspects were on probation on burglary charges. Continue News Release Date:2/12/1998 The same weather patterns that have produced warmer-than-normal temperatures this year could produce more thunderstorms than usual this spring. Homeowners are urged to prepare for possible damaging winds, hail and flash floods. Dr. H.M. van den Dool, chief of the prediction branch of the Climate Prediction Center for the National Weather Service in Camp Springs, Md., told the Texas Department of Insurance (TDI) that Texas continues to have an above-average chance for heavy rainfall, which in Texas often implies severe thunderstorms. Dr. van den Dool says El Nino may have chased off hurricanes from the Texas coast this past summer, but it has opened the door for wet conditions in winter and spring of 98. Texas Insurance Commissioner Elton Bomer said homeowners should be prepared if disaster strikes. "If your home is damaged by high winds, hail or lightning, don't wait to contact your insurance agent," Bomer said. "The sooner you contact your agent, the sooner repairs will be made." Homeowners should keep an updated inventory by photographing or videotaping their personal property. Safeguard your insurance policies and your inventory and keep copies in a safe deposit box. Also, check the limits of your homeowners or renters coverage. Your limits may be too low if replacement costs have risen due to additions, new purchases or inflation. Dr. van den Dool says El Nino weather patterns have strengthened the subtropical jet stream, which is providing Texas with an abundance of moisture coming in from the Gulf and tropical Pacific. Add an approaching cold front to this scenario and you will have the ingredients for strong and potentially damaging thunderstorms. This year's El Nino has recorded the warmest water surface temperatures on record in the eastern Pacific. Previously, the 1982-83 El Nino had been the warmest ever recorded. In May 1982, 123 tornadoes touched down in Texas, one of the worst outbreaks of tornadoes in a single month. "It never hurts to look at your homeowners insurance policy or talk with your agent about coverage," Bomer said. "You may want to add additional coverage, and the time to do that is now." For more information about homeowners insurance and what steps you should take if your property is damaged, call TDI's toll-free 24-hour publications order line at 1-800-599-SHOP (7467) and ask for a copy of:
Or visit TDI's web page at www.tdi.state.tx.us. Continue News Release Date:2/10/1998 Engineers and windstorm inspectors with the Texas Department of Insurance (TDI) will hold a series of training sessions on the state's new building code in five coastal cities beginning later this month. The new building code takes effect June 1. The one-day seminars will provide an overview of the building code for windstorm resistant construction. Course topics will include: limitations, foundations, wood stud wall framing, uplift connections, framing around openings, wall bracing, ceiling framing, roof framing, roof coverings, door and windows, exterior coverings and awning and overhangs. The training sessions are free, but participants must provide their own copy of the Building Code for Windstorm Resistant Construction. The building code booklet is a part of a windstorm construction document package that participants can order from TDI for $72. While the seminars are aimed at builders, contractors and architects, the sessions are open to the public. The one-day seminars will be held in the following cities from 8 a.m. until 5 p.m., with a one-hour break for lunch. February 25 & 26 Harlingen March 11 & 12 Corpus Christi March 25 & 26 Victoria April 8 & 9 Galveston April 22 & 23 Beaumont May 6 & 7 Corpus Christi May 22 & 23 Galveston The locations of each training session will be included with registration confirmation. Participants are asked to register for the training session and order the windstorm construction documents by writing to the Texas Department of Insurance, Engineering Services, MC 103-WT, P.O. Box 149104, Austin, Texas 78714-9104 or by fax at 512-463-6693. For further information call the Texas Department of Insurance Public Information Office at (512) 463-6425 or send a note to PIO@tdi.state.tx.us Continue News Release Date:2/9/1998 The Texas Department of Insurance was recognized today in Kansas City for special efforts in exploiting computer technology and attacking the Year 2000 problem. The National Association of Insurance Commissioners presented the "Technology of the Year" award in ceremonies at the group's quarterly Regulators Conference. Richard Uribe, assistant chief examiner, who directs TDI's external Y2K efforts, and Andy Robinson, director of Information Services, accepted the award for TDI. NAIC initiated the award in 1996 as a way to recognize major technology achievements that serve consumers, regulators and the industry. Texas was honored specifically for conducting a special Year 2000 examination survey of regulated companies and other efforts in determining the industry's Year 2000 readiness. Texas has been a leader at the national level on the Y2K issue. "The special examination survey has provided a wake-up call for some in the industry," said Commissioner of Insurance Elton Bomer. "This agency is not only determined to minimize any public harm that might result from the Year 2000 problem, but also to ensure that no one in the insurance industry ignores this serious threat." For insurance companies, the Year 2000 problem can lead to serious errors in company calculations and transactions. Date-critical errors occur when computer software and chips register the Year 2000 as the Year 1900. Most computers check only the last two digits of the four-digit "year" and read the two zeros as 1900. Insurers also may receive claims as a result of Year 2000 problems their customers experience. TDI's seven-page special exam, part of an agency-wide effort with the University of North Texas Survey Research Center, went to companies in November. It included 45 detailed questions about internal Y2K computer problems and how Y2K events could affect an insurer's bottom line. A copy of the survey is available at TDI's web site (www.tdi.state.tx.us) under "Y2K News." A summary of special examination results will be made available to the Legislature and public. Specific company responses, however, are considered part of TDI's examination process, and, by law, may not be made public. Continue News Release Date:2/4/1998 Commissioner Elton Bomer today reminded Texas HMOs that a new state law requires them to pay their members' first-party claims promptly and subjects them to possible penalties if they don't. A first-party claim is one filed by a policyholder or enrollee against his or her insurance company or HMO. A typical first-party claim by an HMO member would be for emergency care at a hospital outside the HMO's provider network. Bomer also reminded all other insurers that the Texas Department of Insurance expects compliance with a prompt-payment law that has been on the books since 1991. The Commissioner signed a bulletin to all insurance companies and HMOs authorized to do business in Texas. An earlier bulletin reminded HMOs and health insurers with preferred provider plans that another new law requires prompt reimbursement to physicians and other health care providers. "The Texas Department of Insurance has received complaints indicating some insurers and HMOs are not promptly paying claims according to the time limits contained in the Insurance Code, Article 21.55," Bomer said. "Failure to pay a first-party claim within the time limits in Article 21.55 is illegal and may result in disciplinary action." Article 21.55 is the prompt payment law enacted by the Legislature in 1991. The 1997 Legislature strengthened the prompt payment law's provisions regarding HMOs. In general terms, the prompt payment law requires licensed insurance companies and HMOs to:
Continue News Release Date:1/29/1998 Texas Department of Insurance (TDI) Fraud investigators today arrested a Houston attorney who allegedly played a major role in a staged automobile accident scheme. Reginald C. Ike, 47, was arrested by TDI officers at his law office at 3838 Hillcroft in Houston. Ike was charged with third-degree felony theft. If convicted, he could face up to 10 years in prison, a $10,000 fine and the possible loss of his law license. Ike's arrest resulted from a six-month undercover operation conducted by TDI's Fraud Unit. More arrests are expected, investigators said. Undercover officers advised Ike they had staged an auto accident and were looking for assistance. Ike offered to represent them and gave them instructions how to claim multiple non-existent injuries. Ike proceeded to file fraudulent claims against two insurance companies for a total of $65,500. The director of TDI's Fraud Unit, Linda Bayless, said the best way to stop staged accident rings is to start at the top. "It is important that professionals who participate in these types of crimes are going to be subject to criminal prosecution," Bayless said. "Our intent is to work hard to put every person involved in this scheme behind bars." TDI undercover agents were assisted by the National Insurance Crime Bureau, Prudential Property and Casualty Insurance Company, Republic Western Insurance Company and U-Haul Company. Bayless said consumers should be aware they are the ones who ultimately pay for insurance fraud. "Staged auto accidents and other insurance fraud schemes account for at least 10 percent of every dollar we pay for auto insurance." Continue News Release Date:1/27/1998 Commissioner Elton Bomer is warning health maintenance organizations and insurance companies that they risk disciplinary action if they violate new state laws requiring prompt payments to doctors and other health care providers. In a bulletin to be mailed this week, Bomer says the Texas Department of Insurance (TDI) has received numerous complaints from health care providers that HMOs and insurers are not complying with the new prompt-payment laws. "Due to these complaints, spot investigations have been conducted to ascertain the extent of the problem. Our investigations found that there appear to be significant violations to the provisions of the new laws," Bomer's bulletin says. The Texas Legislature passed the laws in 1997 as Senate Bills 383 and 385. Senate Bill 383 applies to preferred provider benefit plans sold by insurance companies. Such plans allow patients to select their own doctors but offer incentives such as no deductibles and reduced copayments to use an insurer's provider network. Senate Bill 385 applies specifically to HMOs. The bills require HMOs and insurers to pay providers for covered services within 45 days after receiving properly completed claims for payment or, when applicable, within deadlines specified in the providers' contracts. Senate Bill 385 also requires HMOs to make capitation payments within 60 days after an HMO member ("enrollee") has selected or been assigned to a primary care physician. Capitation is a fixed dollar amount per covered patient that HMOs pay doctors to serve patients over a specified time period, regardless of the amount of services actually provided. Bomer said in the bulletin that he has directed TDI examiners to verify compliance with the prompt-payment laws when they examine HMOs and health insurance companies. "Please understand that compliance with both Senate Bills 383 and 385 will be closely monitored and enforcement action will be initiated as appropriate to ensure that these laws are observed, " the bulletin says. Continue News Release Date:1/27/1998 Attention: Trade Press For the first time ever, insurers and HMOs can submit required data to the Texas Department of Insurance over the Internet. In a bulletin to companies earlier this month, Commissioner Elton Bomer outlined a special Consumer Protection project that gave companies the option to mail, fax or submit "1997 Policy Count Exhibit" data by filling out a simple form at TDI's web site (www.tdi.state.tx.us). The data is due no later than February 2. The data is used in calculating complaint ratios, which TDI is required to provide consumers. The complaint ratios use the number of justified, verified and valid complaints received against a company as a percentage of the number of insurance policies in force on the preceding December 31. A special password box is designed to prevent anyone other than licensed insurers and HMOs from submitting data. In any case, duplications or apparent discrepancies are double-checked. "If this trial works well, we may try other Internet projects in the future, including rate guide data collections," said Audrey Selden, TDI's Associate Commissioner for Consumer Protection. Continue News Release Date:1/27/1998 Attention: Trade Press The Texas Department of Insurance will hold a compliance workshop for life and health insurance company representatives on February 24 at the University of Texas in Austin. Seating is limited to 200 and two applicants per company. The free workshop, from 8:30 a.m. to 4 p.m. at the Thompson Conference Center, will include a general session on implementation of recent legislation and four "breakout" sessions. Those sessions will include a choice of topics: banks selling annuities, filing requirements, independent review organizations and utilization review requirements, indexed annuities, long-term care issues, overview of advertising requirements and advertising on the Internet, small and large employer health insurance issues, TDI's complaint process: what is a justified complaint and the Texas life illustration rule. Brochures on the workshop are being mailed out this week to all life and health companies. The brochure includes a fax-back registration form. You may also register on-line via TDI's web site at ww.tdi.state.tx.us/consumer/workshop.html. Continue News Release Date:1/26/1998 The Texas Department of Insurance (TDI) now provides profiles of the state's 70 health maintenance organizations (HMOs) on its Internet web site -- www.tdi.state.tx.us. More than 5.4 million Texans currently depend on basic and single-service HMOs for their health care coverage, up about 29 percent from the 4.2 million reported the year before. "As our reliance on managed care grows in Texas, it's more important than ever that individuals and businesses have access to quality information about HMOs," Commissioner of Insurance Elton Bomer said. "These profiles, as well as our consumer guides, give the public information it needs to make more informed choices." Another helpful publication in the works is an HMO "report card" being produced by the state's Office of Public Insurance Counsel. It will be available from TDI's web site when ready. TDI's HMO profiles give consumers and businesses a way to compare basic complaint and financial data as they shop for HMO coverage. As an example, consumers can use the profiles to check complaint numbers or compare administrative and medical costs. Both are helpful in determining how an HMO may be handling members' medical needs. Each profile includes a service territory map, a list of counties served, contact information, enrollment figures and an Internet link to HMO accreditation rankings by the National Committee for Quality Assurance (NCQA), an independent, not-for-profit group that assesses and reports on the quality of managed care plans. HMOs are not required to go through the NCQA accrediting process, however. TDI's profiles are updated quarterly with information from the HMOs. Since the information can change between updates, consumers should verify important details with each HMO before making health plan changes. Continue News Release Date:1/23/1998 Montgomery Ward credit card customers who bought a "Credit Security Plan" (CSP) without realizing it was insurance can cancel the coverage and get their money back with interest under an enforcement order signed today by Commissioner Elton Bomer. Refunds could total as much as $5 million if all consumers who unwittingly bought the insurance seek refunds. "Anybody selling insurance -- whether agents, insurance companies or department store chains -- has a legal and ethical duty to assure that customers understand what they're buying," Bomer said. "The Montgomery Ward insurance companies did the right thing in agreeing to refunds for consumers who were not informed that they were buying credit insurance." Three insurance companies owned by Montgomery Ward consented to the order while disputing Texas Department of Insurance (TDI) staff attorneys' allegations that the companies had violated consumer protection laws contained in the Texas Insurance Code. The companies are Montgomery Ward Life Insurance Co., Forum Insurance Co. and Montgomery Ward Insurance Co., all based in Schaumberg, Ill. TDI began investigating Montgomery Ward's credit insurance plans in response to consumer complaints. Among other things, TDI attorneys said the Montgomery Ward insurers: Encouraged Montgomery Ward customers to buy the Credit Security Plan by signing a line on charge account sales slips without informing them that they were purchasing a package of insurance coverages. Sold the Credit Security Plan to Montgomery Ward credit card holders through telemarketers who failed to fully disclose the plan's nature or its cost. Sold the plan through employees not licensed as insurance agents and used applications -- such as credit sales slip add-ons -- not approved by TDI. State law requires TDI approval of application forms used in the sale of insurance. The Credit Security Plan consists of insurance that pays credit card balances of customers who die or who lose their bill-paying ability because of disability or unemployment. The package also includes credit property insurance, which pays if an item bought on credit is damaged, stolen or destroyed before it is paid for. The alleged violations occurred between November 1, 1994, and February 28, 1997. According to TDI staff attorneys, Montgomery Ward billed for the insurance each month that a credit card holder had an unpaid balance. Premium refunds, including 6 percent annual interest, are available to people who signed up for the coverage on a credit sales slip or through telemarketing. Restitution is not available to consumers who applied on separate application forms approved by TDI. Credit Security Plan purchasers will receive refund offers by mail. To get refunds, they must fill out and return forms saying they were unaware they had the insurance on their Ward's account and want to cancel the coverage and receive their money back. The order also requires the three Montgomery Ward insurance companies to reimburse TDI $500,000 for investigative, legal and compliance costs. This amount will be reduced by as much as $400,000, however, by giving the companies credit for restitution to consumers. In addition to the premium refunds and payment of TDI expenses, the Montgomery Ward insurance companies agreed to cease and desist from: Selling credit insurance without fully disclosing what it is. Using a telemarketing program that does not comply with a detailed "Telemarketing Protocol." The protocol requires clear identification of the insurance company and an explanation of the coverages offered and their cost. An insurance sale by phone may be closed only with a signed application or a recorded oral authorization followed within 15 days by a written confirmation notice. Using application forms not approved by TDI. Selling credit insurance through persons or entities not licensed as insurance agents. Offering merchandise or other inducements to buy insurance in violation of Texas' anti-rebating law. Billing or attempting to collect credit insurance premiums without separately disclosing the rate charged for each category (credit life, credit disability, credit unemployment or credit property). Continue News Release Date:1/15/1998 Product Information Texas Insurance Commissioner Elton Bomer today ordered insurers to give homeowners insurance discounts of up to 35 percent for hail-resistant roofs installed on or after February 17, 1998. Texas is the first state to require such discounts. Discounts of up to 46 percent will be available for dwelling/extended coverage policies. Homeowners who installed hail-resistant roofs prior to February 17 will be eligible for optional discounts. Bomer said the new discount program could prevent hundreds of millions of dollars in hail damage and help lower insurance rates by giving property owners a financial incentive to buy roof coverings certified to withstand the impact of hailstones. " This is a revolutionary step for consumers, insurers and roofing manufacturers," Bomer said. "Homeowners who install hail-resistant roofs will save money on their insurance and avoid the headache of replacing roofs after hail storms." Discounts must be given for all roofs, except metal roof coverings, classified by Underwriters Laboratories on a 1-through-4 scale. A Class 4 roof covering offers the best hail protection and will receive the highest discounts. The discounts vary among eight different regions across the state for homeowners coverage and six regions for dwelling/extended coverage. Areas with the worst history of hail storms would get the biggest discounts. Both rate-regulated and non-rate-regulated insurance companies must offer discounts. Lloyds companies and reciprocal exchanges, which are exempt from rate regulation, may decide the amount of discount they will offer, either higher or lower. Companies have the option of offering homeowners who installed hail-resistant roofs prior to February 17 discounts between the highest and lowest amounts offered in their territory. Following a December 3 public hearing on the discounts, Bomer formed a working group of insurers, roofing manufacturers and consumer representatives to address the metal roofing and cosmetic damage issues for those types of roofs susceptible to such damage. Bomer will hold a separate hearing to consider allowing mandatory discounts for metal roofs. In addition, Bomer plans to propose an endorsement allowing insurance companies and policyholders to exclude coverage of merely cosmetic damage -- not only to metal roofs but to all types of roof coverings. Bomer said while hail-resistant roofs may cost more, the large discounts should allow homeowners to recover their out-of-pocket expenses through lower insurance costs. " Homeowners should take a look at the cost of new, stronger roofs versus the expected savings on their premiums," Bomer said." For the worst hail-prone areas, homeowners should be able to recover the cost of a new roof in just a few years." To qualify, roof covering materials must undergo impact resistance tests developed by Underwriters Laboratories (UL). The shingles must be packaged with information that shows the brand name, the year of manufacture, the fact they passed UL Standard 2218 and their classification number. By January 1, 1999, each shingle must show this information. The discounts were recommended by the Texas Department of Insurance's Residential Property Insurance Loss Mitigation Advisory Committee, which consists of representatives from the insurance industry, roofing industry, consumer organizations and TDI staff. Bomer said homeowners intending to install new roofs beginning February 17 should deal with reputable roofing contractors and ask for roof coverings that have passed the UL Standard 2218 tests. Homeowners can contact TDI by phone at 1-800-252-3439 or check the TDI Website at www.tdi.state.tx.us to see the discounts for their counties. Homeowners also should contact their insurance companies to verify the discounts they will receive for installing new roofs. Bomer said he looks forward to seeing homeowners take advantage of this unique program. "I expect to see roofing manufacturers get very aggressive in providing a product that is hail-resistant at competitive prices," he said. NOTE FOR NEWS MEDIA -- For territories and homeowner discounts for all four roof classifications contact TDI's Public Information Office at 512-463-6425 or check TDI's Website at: www.tdi.state.tx.us Continue News Release Date:1/8/1998 This month's Houston Auto Show will feature not only the latest cars and trucks but also automobile insurance rate guides that can save money for consumers. The auto rate guides, available free at the Texas Department of Insurance booth, list prices that major insurance companies charge for minimum amounts of liability protection. The rate guides lists sample premiums for four groups: motorists between the ages of 25-64, single males under 25, single females under 21 and motorists 65 and over. Where a person lives and the use of their vehicle also affect rates. Rate guides for all 52 territories in the state are available. "People who question whether their auto insurance is too high should shop around," said State Insurance Commissioner Elton Bomer. "In Houston, our rate guide shows there could be a $1,400 difference in rates for the same coverage." The auto rate guides, available free at the Texas Department ofThe rate guides also feature an insurance company's market share, its financial rating, its complaints ratio and phone number. Bomer said the auto rate guides and other insurance consumer brochures will be available at the auto show and TDI personnel at the booth will be happy to answer questions. Free rate guides for both auto and homeowners insurance and other brochures also can be obtained by calling 1-800-599-SHOP (7467) or by visiting TDI's web site at: www.tdi.state.tx.us. The auto show runs from Saturday, January 24, through Sunday, February 1, at the Houston Astrohall, 8400 Kirby. Continue News Release Date:1/5/1998 Insurance Commissioner Elton Bomer and Prudential Insurance Company of America officials signed a consent order today requiring the company to pay a $150,000 administrative penalty and to reimburse Texas insureds who were denied payment for oral contraceptives under group health insurance plans. Prudential was unable to estimate the total refunds for persons who were denied payment for oral contraceptives between March 13, 1985, and December 1996, due to factors such as copayments, coinsurance and deductibles. However, Prudential currently has approximately 100,000 insureds in Austin, Dallas, Houston and San Antonio who are covered under affected group health insurance plans. The order doesn't affect members of Prudential's health maintenance organizations or other plans that covered oral contraceptives by rider. Texas Department of Insurance (TDI) rules adopted in 1978 prevent insurers from excluding oral contraceptives from prescription drug benefits when all other prescription drugs are covered. In 1985, after learning that not all insurers were following this requirement, the Department issued a bulletin restating the position. According to the consent order, Prudential denied coverage for oral contraceptives prescribed for pregnancy prevention, claiming they were not medically necessary for treatment of sickness or accidents. The company ended the practice in November 1996 and sent a letter to affected women of child-bearing age offering reimbursement for oral contraceptive prescriptions previously denied for payment. Prudential officials denied any violation of state statutes or TDI rules but said they agreed to the consent order "to fully and finally resolve the allegations" made by TDI. "This settlement is fair both to the company and to the covered employees who were denied payments for oral contraceptives," Bomer said. "I want to thank Prudential for agreeing to set things right and to make sure that everyone receives proper payment in the future." The consent order requires the company to send a letter with a notice of reimbursement to current employers who contract to provide group accident and health insurance to their employees. In addition, employers will be asked to post notices on bulletin boards and other locations where employees might see them. A similar letter and notice will be sent to former policyholders (employers) who contracted with Prudential during the years 1993 through 1996. Employees of these former and current policyholders covered under the Prudential group insurance plan will be able to submit claims for expenses that they may have incurred during the years 1985 through 1996. Prudential will pay these claims after it determines whether deductibles were met. The $150,000 administrative penalty goes into the state general fund. Continue For more information contact: PIO@tdi.state.tx.us Last updated: 05/30/2006 |
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