Copyright 1999 Star-Telegram Newspaper, Inc.
Fort
Worth Star Telegram
October 2, 1999, Saturday FINAL AM EDITION
SECTION: BUSINESS; Pg. 1
LENGTH: 380 words
HEADLINE:
Tort reform paring down insurance premiums
BYLINE: Michael Holmes
SOURCE:
Associated Press
BODY:
AUSTIN - Texans should save
about $ 685 million on insurance
premiums next year under requirements that
insurance companies share
tort reform savings, Insurance Commissioner Jose
Montemayor said
yesterday.
The cuts, which take effect Jan. 1, will
bring to about $ 2.9
billion the total savings for consumers under 1995 laws
curbing
people's ability to file lawsuits, Montemayor said.
"Tort
reform has been a tremendous success," he said. Texas Department of Insurance
officials say tort reforms have had
the biggest effect on auto insurance and
business liability policies.
Motorists have saved about $ 1 billion over
the five years in which
the Legislature required rate reductions, the agency
said. Businesses
have realized more than $ 1 billion in savings
from reduced rates for
general liability and commercial multi-peril
policies.
The state-required cuts followed votes by the 1995 Legislature
to
limit lawsuits that can be filed in Texas.
Lawmakers said that in
return for fewer lawsuits, insurance
companies - which often spend money to
fight and pay lawsuit claims -
must lower their rates. Insurance
cuts associated with the lawsuit
limits were to be set each year for five
years by the insurance
commissioner.
Montemayor's announcement was
viewed skeptically by consumer
advocates.
The Center for Economic
Justice, an advocacy group for low-income
consumers, said insurance
companies are saving more than consumers
under the tort reform law.
"The insurers' actual premium and loss experience shows, without
doubt, that insurance companies, not consumers, have been the
beneficiaries of tort reform," the group said.
"Texas auto insurers
have not significantly reduced rates in 1999
and, consequently, 1999 will be
the fourth consecutive year of
excessive overcharges to consumers and
windfall profits for Texas
auto insurers. Texas consumers deserve
some relief from 'tort
reform. ' "
But insurance industry spokesman
Jerry Johns said tort reform and
other factors have undoubtedly led to
reductions in auto and business
insurance rates.
"Insurance
companies have repeatedly reduced auto rates in the
state of Texas over the
past two years," said Johns, president of
Southwestern Insurance Information
Service.
LOAD-DATE: October 5, 1999
