Preparing for the Future: Texas Homeowners Insurance Innovations

1. Casualty Actuary SocietyNew Orleans, LouisianaNovember 11, 2003 C30:Texas Homeowners Ronald H. Cobb American Insurance Association

2. Batten Down the Hatches . . . Storm Clouds on the Horizon • 2001 Legislative Session • Preparing for 2003

3. TCAIS (Texas Coalition for Affordable Insurance Solutions)

4. www.tcais.org

5. Principles and Solutions • If adopted, these principles would lead to increased coverage choices for consumers and a more competitive market in Texas. The result would be more meaningful choices of different products and prices, and more ability for insurance companies to respond to market conditions. New discounts could be readily developed and offered, and consumer demand could dictate innovation. Solid regulatory and legislative oversight of the market would ensure that consumers benefit from these proposed changes. • STATE AUTHORITY OVER RATES AND RULE MANUALS • STATE AUTHORITY OVER POLICY FORMS • STATE AUTHORITY OVER SOLVENCY • STATE AUTHORITY OVER MARKET CONDUCT • STATE AUTHORITY OVER ACCESSIBILITY • STATE AUTHORITY OVER CONSUMER PROTECTIONS • STATE LEGISLATIVE OVERSIGHT

8. 2003 Legislative Session • Results • HO • Auto • Rating Law

9. What’s Ahead • Post Legislative Underwriting Tools • Approved for use in place of dart board and blindfolds. • “Clean often, store in a warm dry place.” “Indicated results from use of dice are actuarially sound”

10. Next Crisis