Sen. Kelly Hancock filed Senate Bill 548 to abolish the Office of Public Insurance Counsel (OPIC) this week. We’ve been down this road before. It was a bad idea two years ago when OPIC was on the chopping block. And, it is a bad idea now.
OPIC plays an essential role in consumer protection. It is the state office tasked with representing the interests of insurance consumers. Rather than eliminating it, we should give this tiny state office stronger authority to force insurance companies to the table when the interests of consumers are threatened. Texans already pay the highest home insurance rates in the nation, and checks on insurance industry abuses are already few and far between.
Why would lawmakers even consider eliminating the one thing that gives Texas policyholders a fighting chance against Big Insurance?
Well, just last week, OPIC took the unusual step of asking the insurance commissioner to conduct a formal rate hearing into State Farm’s huge 20% rate increase. A request the commissioner granted. Could this have anything to do with this bill getting filed? We certainly hope not. By objecting to State Farm’s latest rate hike, OPIC is fulfilling its statutory duty to represent the interests of insurance customers. This state office with a handful of employees and a tiny budget shouldn’t be threatened with abolishment simply for doing its job.
OPIC’s independence from the insurance commissioner is crucial to its ability to advocate on behalf of policyholders. In our system of insurance oversight, the Insurance Commissioner is tasked with being the referee. Without OPIC, consumers are left with no representation in key regulatory proceedings and the balance shifts irreparably to the industry. Private consumer advocates do not have the resources or access to proprietary insurance filings to enable them to fulfill OPIC’s functions.