Texans are Gettin "Brokebacked" by the Republicans !

Insurers still owe millions in Texas
Lawsuits, court rulings prevent policyholders from getting money
09:00 AM CST on Saturday, February 4, 2006
By TERRENCE STUTZ / The Dallas Morning News
AUSTIN – More than half a billion dollars. That's how much Texas' three largest insurers owe homeowners, state officials say.
But because of a combination of lawsuits, court rulings and various legal maneuvers, the policyholders of Allstate, Farmers and State Farm – collectively holding about 58 percent of the market – are still awaiting checks and premium reductions that regulators ordered to compensate for overcharges.
And there's no end in sight.
"When you get into court in some of these cases, it's like walking in mud," said Jim Hurley, a spokesman for the Texas Department of Insurance.
Mr. Hurley said the agency is pursuing every avenue to get the money to its rightful owners, about 2.2 million homeowners across the state, but those efforts are now bogged down. The companies say their rates are fair, and in Farmers' case, a lawsuit by its own policyholders has delayed payments.
The various legal fights stem from regulators' efforts to force refunds after insurance costs skyrocketed because of the mold crisis of 2001-02. And since none has been resolved, the total cost of the case is piling up.
Alex Winslow of Texas Watch, a consumer group active in insurance rate issues, said State Farm and Allstate have been found by the state to be clearly overcharging their customers, with the excessive charges mounting daily. The half-billion figure is a running total of refunds ordered for the three companies combined and does not include any interest they might have to pay.
"It is past time for these companies to quit abusing their policyholders and return the money that rightfully belongs to them," he said.
Insurers made record profits in Texas in 2004, with an average loss ratio of 27.6 percent. In other words, Texas insurers paid out 27.6 percent of premiums to cover their property losses 2004.
That figure was less than half the 58.5 percent loss ratio in 2003, considered a good year for the industry. That followed two years in which companies operated in the red. No figures are available yet for 2005.
Court battles
The insurance department accused State Farm of overcharging its million customers in Texas by about 12 percent dating back to the fall of 2003. Estimates of the overcharges – or potential refunds to policyholders – have ranged to more than $350 million plus interest.
With the most money to lose, State Farm mounted a legal strategy that has held the state at bay for 2 ½ years. State Farm won the last round in state district court when a judge ruled the company was denied due process after the commissioner of insurance ordered it to cut rates 12 percent in the fall of 2003.
The attorney general's office appealed on behalf of the insurance department, and the case is now before the state's 3rd Court of Appeals.
"We believe our current rates are fair and competitive," said Sophie Harbert, a spokeswoman for State Farm Lloyds, the company's home insurance subsidiary in Texas.
"Our base rates for homeowners insurance have not changed since January of 2003," she added, pointing out that Texas is known for damaging and often catastrophic weather conditions.
Ms. Harbert said it was the insurance department that was found to be violating State Farm's legal rights in the most significant ruling so far in the case. The state was shut out on another legal front when State Farm lawyers blocked an attempt by the insurance commissioner to put the company's rates under direct state supervision.
No. 2 insurer
Allstate is fighting over a smaller amount, but the state's No. 2 insurer is just as adamant that its rates are not excessive.
"The recent hurricanes on the Gulf Coast pointed out the need for adequate rates so we can maintain our obligations to our policyholders," said Joe McCormick, a spokesman for Allstate. "Our current rates are adequate, and they are also competitive across the board."
The state ordered Allstate to reduce its homeowners rates nearly 9 percent in a case that began in the fall of 2004. More than $60 million in alleged overcharges, plus interest, is at stake in a case before a state administrative law judge.
Unlike Farmers and State Farm, Allstate did not initially oppose a rate reduction order from the commissioner after the reform law went into effect. Allstate agreed to cut its rates 10 percent and consider another 8.75 percent reduction a year later. The insurer decided to issue refunds of $60 million in the fall of 2004, but balked at the second cut, appealing to a state administrative law judge to head off the reduction.
Mr. McCormick said Allstate's home insurance rates are less than they were in early 2003, before the Legislature passed a massive insurance reform law later that year.
Other agreements
Several other smaller insurers reduced their premiums under orders from the insurance commissioner, and even Farmers reached an agreement with the state in 2004.
Farmers Insurance, unlike the other two heavyweights, agreed to refund $117 million to its Texas customers in a settlement with the state, but a group of plaintiffs blocked the agreement in a case expected to be heard by the state Supreme Court. The plaintiffs contend the settlement was a bad deal for Farmers policyholders.
That settlement, which ended a 15-month standoff between Farmers and the insurance department, reduced premiums for homeowners coverage by an average 20 percent. Farmers agreed to trim rates 5 percent through mid-2006 and to give its customers an additional 15 percent when their policies came up for renewal in 2005.
But the agency came under criticism for dropping its demands that Farmers issue refunds for millions of dollars of overcharges in 2003 and 2004. Mr. Winslow said that the insurance department needs to use new powers given to it by the Legislature last year, such as assessing stiff financial penalties if a company continues to charge excessive rates.
"We still think homeowners are being charged too much in Texas," Mr. Winslow said.
WHERE THE INSURERS' CASES STAND
Here's a look at the three major pending homeowners insurance disputes:
State Farm: Sued the Texas Department of Insurance seeking to overturn a 2003 state order that the company reduce its homeowners premiums by 12 percent. State Farm won the first round, and the case is on appeal. If State Farm loses, it would be on the hook to its policyholders for more than $350 million, plus interest.
Farmers: Has agreed to refund $117 million in overcharges to its customers, but that's been frozen for three years because of a lawsuit filed by a group of Farmers policyholders who say it is a bad deal. The Texas Supreme Court is expected to hear the case.
Allstate: It's contesting a state order to reduce its rates by nearly 9 percent in a case that began in the fall of 2004. Allstate, like State Farm, disputes insurance department contentions that it is overcharging Texas customers. An estimated $60 million, plus interest, is riding on the case, now before a state administrative law judge.
E-mail tstutz@dallasnews.com
source: http://www.dallasnews.com/sharedcontent/dws/news/texassouthwest/stories/020406dntexinsure.21a3ec74.html
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http://www.publicintegrity.org/partylines/report.aspx?aid=661
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Lobby takes control of Texas government

Archive Recent Editions 2003 Editions Jan 18, 2003
Author: John Lane
People's Weekly World Newspaper, 01/18/03 00:00

Opinion

The headline over a recent article in the Economist proclaimed: “The Future is Texas: If you want to know where America is heading, start by studying the Lone Star State.” It went on to gush about the state’s “incredible ability to make something out of nothing,” its “openness,” (?) and its “creativity.”
It also noted that Texas “is the land of low taxes, weak trade unions, a shriveled public sector and a paltry welfare state.”
What it didn’t point out, and what it probably should have, is that the state is in the midst of taking crony capitalism to new heights because the business lobby has taken unprecedented control of state government.
Their aim is to channel more public funds into the hands of favored businesses, privatize as much wealth as possible, and give business a free rein to maim, loot, and pollute without regard to the public interest. If the Bush cartel and the Republican National Committee have their way, what is happening in Texas today could well be the future of the U.S.!
The cozy relation between state government and business has been on gaudy display since the Republican sweep of all state offices in last November’s election. As Andrew Wheat said in the Texas Observer, “rather than having corporations pay lobbyists millions of dollars to influence government, the state’s new leaders recruited some of Texas’ most powerful lobbyists to run the government directly.”
Tommy Craddick, a veteran right-wing Republican back-bencher poised to become the Speaker of the House when the legislature convened Jan. 14, appointed three business lobbyists to manage his transition team: Bill Miller, Bill Messer, and Bill Ceverha. They represent clients from the pharmaceutical, property insurance, and health insurance industries.
Gov. Rick Perry tapped Mike Toomey to be his chief of staff. Toomey is a lobbyist for, among other companies, Reliant Energy, Texas’s largest private energy company. These new public servants also represent some of the state’s major polluters: ARCO, Koch, Eastman Chemical, Rohm & Haas, and Alcoa.
This new lineup in state government has the access capitalist crowd salivating. The Texas Association of Business (TAB) recently issued its legislative agenda, which calls for more privatization of government services, an end to dues checkoff for public employees, stifling any new laws that may interfere with the right of bosses to bust unions and maintain absolute control over their workers, and no new taxes for businesses (even though Texas is facing a $5 billion to $12 billion budget dollar shortfall).
There’s a good chance that TAB may get its wish list fulfilled because its executive director, Bill Hammond, has been mentioned as Speaker Craddick’s new chief of staff.
The privatization of Texas government took another leap with the ascendancy of the Texas Public Policy Foundation. This right-wing think-tank out of San Antonio has been a major proponent of school vouchers and an opponent of the right to choose, unions, and affirmative action. It gave substantial contributions to the right-wing Republicans who now control state government. The foundation used its connections to encourage new and returning members of the legislature to attend its legislative seminar in Austin prior to the legislature’s convening. The purpose of the seminar was to build support for its agenda of no taxes for the rich, cutbacks in government services, and privatization of education and government services.
Texas has always been known as a business-friendly state. It’s a right-to-work-for-less state, it has a regressive tax structure that imposes the biggest tax burden on low- and middle-income families, it has huge loopholes that allow companies such as Dell and SBC to avoid paying any franchise taxes, and its unemployment insurance and workers’ compensation programs are among the least generous of all states. It’s hard to imagine how things could get worse, but the business lobby and their friends in public office are certainly going to give it a try!

John Lane is a writer from Austin, Tex. He can be reached at pww@pww.org
source: http://www.pww.org/article/view/2767/1/133/
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Austin American Statesman: Insurers Were TAB's Biggest Donors
Submitted by Fred on Fri, 07/22/2005 - 8:15am.
CAMPAIGN FINANCE INVESTIGATION
Study of records reveals corporations that contributed to 2002 state election efforts

By Laylan Copelin

The Texas Association of Business secretly financed its 2002 election effort largely with money from an insurance industry that was trying to fight tougher regulations at the Capitol, the Austin American-Statesman has determined after studying TAB's records.
The state's largest business organization has fought disclosing its corporate donors for almost three years, saying that would violate the companies' First Amendment rights. But among 20,000 pages of documents the business group has released, it left telltale clues that identify 18 corporations — 15 of them insurance companies — that helped finance a Republican takeover of the Legislature.
By disclosing almost two-thirds of its 30 or so corporate donors, TAB may have undercut its arguments to keep secret the other donors' names.
In 2002, insurance companies were besieged by irate ratepayers whose bills had gone up. The following spring, the Legislature approved an insurance bill that consumer groups said fell short of real reform. Lawmakers also passed a lawsuit bill that business and insurance groups had backed.
State law generally prohibits spending corporate or union money on campaign activities, but the association has argued that its mailers, which criticized Democrats and touted Republican candidates, did not advocate the election or defeat of any candidate because they avoided using words such as "support" or "oppose."
That argument has played out for almost three years as part of a grand jury investigation and at least three lawsuits that losing Democratic candidates filed against the business organization.
Last month, the Texas Supreme Court ordered that TAB must provide documents to the Democrats, but there was no requirement to disclose the corporations that contributed $1.7 million to send 4 million pieces of mail to voters in 24 pivotal legislative districts.
TAB blacked out the corporations' names and many other identifying marks but left untouched several pieces of information: original documents without the names blacked out, bank account numbers that could be compared to other checks or invoices, and some signatures left exposed.
TAB's lawyer, Andy Taylor, invited reporters to examine the pages, assuring them "nothing's there."
On Thursday, Taylor denied that TAB may have made a mistake in editing the documents, except in two or three instances when original checks or invoices were released without the corporate names adequately blacked out.
He said he had no choice but to follow the court order: "We had to give everything but the names. We didn't have the right to redact anything else."
Identities a surprise
Austin lawyer Buck Wood, who represents the Democrats suing TAB, said he will add those companies as defendants in the lawsuits.
"I was surprised there was information given to me to allow us to identify the donors," Wood said. "I think we'll get them all now."
Among the 18 identified corporate donors, only AT&T Corp., the National Federation of Independent Business and a small data company in the Rio Grande Valley are not involved directly in insurance matters. But those organizations also had an interest in controlling insurance costs and limiting lawsuits.
The insurance firms included giants such as United HealthCare, Cigna, Aetna, Humana, PacifiCare, Blue Cross of California, State Farm and Allstate.
The donations ranged from $100 to $300,000, with most of them at least $40,000 per company.
Officials with most of the corporations either declined to comment because of the threat of litigation or the criminal investigation or did not respond to inquiries from the American-Statesman.
Officials with Liberty Mutual Insurance Co., Allstate Insurance Co. and the business federation confirmed donating to TAB's voter effort. And they emphasized that the money was used to educate voters, not to campaign for candidates, which would be illegal.
"Our contribution to TAB was to help the business community, which we are major part of, publicize a pro-growth business agenda in Texas through a voter education project," Liberty Mutual spokesman Joe Cusolito said.
"We certainly wanted to educate voters on business issues that were important to us," Allstate spokesman Joe McCormick said. "If we wanted to contribute to a candidate, we'd do it through our PAC and not an effort like that."
Unlike the other TAB donors, which just donated money for the overall effort, NFIB designated its $1,000 for a mailer discussing the differences between Supreme Court candidate Dale Wainwright and his opponent.
"We believe we acted within all campaign finance laws," NFIB spokeswoman Nancy St. Pierre said.
Some companies, however, may have not understood the nuances of the ban on corporate money in connection with a campaign.
Allstate, for example, labeled its $20,000 donation as a "political contribution" on the check stub.
Raising larger sums
As TAB tried to elect a Republican majority in 2002, President Bill Hammond largely abandoned the traditional method of raising contributions from individuals and focused on tapping corporations because he said it was easier to raise corporate money in large sums.
Hammond found an insurance industry eager to contribute to his plan to help elect Republicans with money that would not be reported to the Texas Ethics Commission.
Homeowners and doctors were complaining of skyrocketing rates, regulators appeared to be cracking down, companies were threatening to leave the state, and candidates were promising to fix the insurance crisis.
Hammond was intent on increasing his association's influence at the Capitol through the voter education program, and its early success bred enthusiasm.
"Bill — Our first check in voter 'education.' Thought you would want to see it!!!" a TAB lobbyist wrote on a $40,000 check from Aetna.
After the 2002 election and a 2003 legislative session led by TAB-backed Republicans, the insurance industry fended off the harshest regulatory proposals. Industry critics say homeowners and doctors received little — if any — relief in rates.
"It's the insurance companies, not the consumers, the patients or even the doctors, that profit from tort reform," said Alex Winslow, executive director of Texas Watch, a consumer advocacy group.
Tom Bond, an Austin lawyer for many insurance companies, said the 2003 legislative session was "heavier than usual" for the insurance industry. But he said it is not unusual for the industry to participate in the political arena.
Bond, who said he did not participate in TAB's voter education program, said he has worked with the organization on various legislative issues.
"The talk at the time was that TAB was trying to provide an organized way for people to participate (in politics) instead of through their own associations," Bond said. "It was my impression they solicited the whole world, including the insurance firms."
As TAB faced criminal investigation and civil lawsuits, Taylor argued that his client, and its secret donors, have a First Amendment right to educate voters during the elections without disclosing the source of the money to the public.
TAB's critics accuse the organization of committing a felony by spending the corporate money and undermining the campaign disclosure laws.
Resisting disclosure
In November 2002, Travis County District Attorney Ronnie Earle, a Democrat, initiated his investigation within days of a Republican sweep at the polls after Hammond boasted about his organization's "unprecedented show of muscle."
Hammond wrote to TAB's members that they had "blown the doors off" the election by spending $2 million on pivotal legislative races.
TAB stymied Earle's investigation for a year by fighting attempts to turn over documents or have its leaders testify before the grand jury. Taylor took the fight to several appellate courts, including the state's top criminal and civil courts and the U.S. Supreme Court.
He lost on all counts. TAB turned over eight boxes of documents — without the donors' names — to the grand jury, and a couple of its staffers had to testify behind closed doors.
"I think we made it very clear to our donors that we respect their right to anonymity," Taylor said. "We have fought the good fight to protect their right to confidentiality."
On another front, the defeated Democratic candidates had sued the business association and won the right to force them to surrender documents — again without the names. The Texas Supreme Court ultimately upheld that order.
On Thursday, Taylor said TAB would continue to fight to protect the identities of a handful of corporate donors that remain a mystery.
"TAB has not and will not voluntarily disclose the name of our donors," he said. "We will continue to protect their identities."
source: http://www.cleanuptexaspolitics.com/node/view/603