State Policyholder Advocate Opposes Arbitration Proposal
The Office of Public Insurance Counsel has weighed in opposing a proposed pre-dispute binding arbitration provision currently under consideration by the state insurance commissioner. OPIC is the state office tasked with representing policyholders in rate and form filing decisions.
In her letter to Commissioner David Mattax, Public Counsel Deeia Beck writes of arbitration generally:
When parties are not equals in these respects, arbitration proceedings place the less powerful at an extreme disadvantage. While I am tempted to use the "David versus Goliath" analogy to illustrate my point, sadly it isn't really appropriate when describing this inequality. David at least had a sling and five smooth stones. Texas insurance consumers would not have the benefit of any analogous tools in an arbitration proceeding against an insurance company.
Ms. Beck goes on to urge Commissioner Mattax to reject the proposal:
This is a policy bridge the TDI should not cross in our opinion ... OPIC respectfully requests that you keep the lid tightly closed on this Pandora's Box by prohibiting this and all future arbitration endorsements in personal lines sold in Texas.