Local News

Mar 5, 2014 6:35 PM

As Insurance Rate Hike Looms, Commissioner Gets Earful

CORPUS CHRISTI - It's a white-collar problem affecting a largely blue-collar coast and today in Corpus Christi, the people of that coast, made their voices heard.

They're upset. They don't want the Insurance Commissioner to implement a rule that would give insurance carriers the authority to surcharge insurance policies.

The surcharge is allowed under a rule that is itself buried deep in Section 2210 of the Texas Insurance Code that governs the operation of the Texas Windstorm Insurance Association.

The association is the state-created insurer that writes wind and hailstorm in the 14 counties on the Texas coast where private carriers have stopped providing such coverage.

It's always been ill-suited for the task: it's subject to political gridlock, it has a hard time staying in the black and it carries about $82 billion in exposure, about $15 billion of which is right here in Nueces County.

The Insurance Commissioner must by law hold a public meeting to allow comment on the rule before she makes the final decision.

Insurance Commissioner Julia Rathgeber has held three. One in Austin, one in Beaumont and today's meeting in Corpus Christi at Texas A&M University.

State Rep. Todd Hunter, R-Corpus Christi, told Rathgeber that natural disasters aren't limited to the Texas coast and shouldn't be treated that way.

"We've had brush fires, grass fires we've had tornadoes," Hunter said. "We've had hail. You've never heard a coastal resident say 'Tax those people, we don't wanna carry our load.'"

Rathgeber remained stoic to the cheers and the jeers, many of them in response to Hunter's comments.

As insurance commissioner, her job is to remain dispassionate.

She later told KRIS-6 that, like chalk lines on a football field, lawmakers set the boundaries inside which regulators must operate.

"When we've been given a law in 2011 - HB3 - we are trying to follow that law and provide the implementation necessary for that law," Rathgeber said. "And, that's what we're doing here today."

And just because the rule is approved is not a guarantee that a surcharge will appear on your bill.

As we've told you before, the surcharges would repay if the Texas Windstorm Insurance Association needs to go out and get a Level 2 Bond, which is only needed after hurricane claims top about $1.5 or $2 billion.

And then, the surcharge would only apply in the designated catastrophe zone.

But if it does strike, and Corpus Christi is on the hook, the surcharge could mean hundreds a year for some households.

And people won't know how much the surcharge will be or for how long it will last until after the storm strikes, not before.

Lawmakers only meet in odd-numbered years so unless the governor calls a special session to specifically address this topic, any chance at changing the rule before this hurricane season and probably the next one, is remote.

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