The Facts

  • Senate Bill 14 (2003) called for a transition to a file-and-use regulatory system for homeowners’ insurance, with the intention of having a file-and-use system in place as of December 1, 2004.
  • Texas’ system of rate regulation for homeowners insurance includes pre-market and post-market regulatory tools, where rates can be rejected before or after they are first used in the marketplace. This reduces competition in the marketplace.
  • TDI’s belated implementation of a 1997 provision allowing insurers to use national forms, along with lawsuit abuse, caused premiums to rise dramatically. This delay ultimately cost consumers more than $900 million. After TDI allowed insurers to use non-standard forms in 2002, mold claims plummeted and rates stabilized.



  • Adopt a true file-and-use system allowing the Commissioner to disapprove only rates in use.
  • Shift the focus from blocking “excessive” rates to guarding against inadequate or discriminatory rates.
  • Implement a true file-and-use system for policy forms, and focus policy-form regulation on the wording and clarity of an insurance form rather than the content of a form.
  • Allow the Commissioner to place under prior approval only those companies whose financial positions warrant increase supervision in order to maintain solvency.