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As if we actually had any meaningful insurance regulation in Texas now, a recent article in the Dallas Morning News says we may have even less in the near future, due to budget cuts. Insurance "regulation" in Texas has been a joke for many years, so I'm not certain that no regulation at all would be any worse than what we have now. Here are excerpts from the article:

Texas will have to consider less regulation of insurance companies and their rates if the Department of Insurance sees its funding cut 10 percent to help balance the next state budget, Insurance Commissioner Mike Geeslin said in documents filed this week with the governor and legislative leaders.

Consumer groups and other critics are calling on the Legislature to ramp up regulation of the insurance industry next year. But the commissioner warned that deep funding cuts could force the state to switch to a new regulatory system, such as one that is more concerned with giving consumers information about insurance products than keeping tabs on rates.

"If reductions of $29 million (10 percent of the agency's budget) were implemented, TDI cannot predict the effectiveness of the current regulatory structure in Texas," Geeslin said in a summary of his legislative appropriations request for the next two-year budget.

"If you want to cut weight from a car, and you remove two of the tires and half the transmission, it ceases to work like a car. The same could be said" for the department, Geeslin said. "It could be scaled down to a certain level, but at some point it ceases to work efficiently."

Geeslin suggested two possibilities, including one in which the agency would be focused on giving information to consumers to help them buy insurance policies. The other would have the agency monitor the business plans of companies to make sure they are following them. The agency would be less concerned with "legal infractions" and individual actions of insurers under both options.

Regarding a potential 10 percent reduction, the commissioner said the impact "would critically impair [the department's] ability to effectively regulate the insurance industry and workers' compensation system under current Texas law."

Alex Winslow of Texas Watch, a consumer group active in insurance issues, said that the suggestion to weaken oversight of companies as a way to pay for budget cuts "takes Texas in the wrong direction."

"We need stronger oversight to ensure rates are fair and claims get paid in full and on time ? not weaker standards that allow insurance companies to abuse Texas homeowners even more than they already are," he said.

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