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button.gif (899 bytes) CEJ's Mission
button.gif (899 bytes) Who We Are
button.gif (899 bytes) Accomplishments
button.gif (899 bytes) Publications
button.gif (899 bytes) How You Can Help
button.gif (899 bytes) Press Resources
button.gif (899 bytes) Tort Reform
button.gif (899 bytes) Insurance Regulation
button.gif (899 bytes) Credit Insurance
button.gif (899 bytes) Insurance Credit Scoring
button.gif (899 bytes) Redlining
button.gif (899 bytes) Health Insurance
button.gif (899 bytes) Telephone Availability
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1701A S. 2nd Street
Austin TX 78704
(512) 912 1327
(Fax) 912 1375


Credit Insurance. CEJ issued a national report with Consumers Union entitled Credit Insurance: The $2 Billion a Year Rip-Off in March of 1999. The story was covered in at least 30 newspapers around the nation, including The New York Times, the Los Angeles Times, the Chicago Tribune, the Wall Street Journal, and the Washington Post. The report prompted the National Association of Insurance Commissioners to vow to restudy credit insurance product pricing and to study credit property insurance in particular, and to draft model legislation for its regulation.

Credit Insurance Rate Reduction. As reported in the Wall Street Journal, in 1999 CEJ requested a hearing on Texas credit insurance rates and lead the charge for consumers in the first credit insurance rate case in six years. As a result of CEJ's efforts, the Commissioner reduced rates for credit life insurance by 21% and reduced rates for credit disability insurance by 18%, for a total savings of $80 million per year to Texas consumers. In his decision in the case, the Commissioner specifically mentioned his reliance on CEJ's testimony and cross-examination of industry witnesses.

Insurance Redlining. CEJ issued a report conclusively establishing that Texas auto insurers force Texans in low income and minority communities to buy higher-priced policies to comply with mandatory insurance laws. Our follow-up report identified the insurers with the worst records. Virtually every major paper in the state, including USA Today, ran a story about the studies. CNN/Time reported on the study and highlighted it as the only such study in the nation. Ten state senators took the news reports of our first study and wrote a letter to the Commissioner demanding that he act to solve the problem. The Commissioner responded by taking a number of steps to increase insurance availability. In response to our second report, the Department initiated an investigation of the companies we identified, including a $10 million enforcement action against Nationwide Insurance Co. Insurers have reacted to our studies by filing lawsuits to suppress all releases of insurance availability data.

Telephone Disconnection Rule. A Texas Public Utility Commission rule allowed a local telephone company to deny local service to a consumer who owes a debt to a long distance carrier. Eight percent of Texas households do not have a telephone. Most of these consumers can afford local telephone service but cannot pay off the long distance debt. We sought and obtained a new rule to require telephone companies to offer local service (only) to these consumers.

Debunking the tort reform "savings". In 1996,1997 and 1998, the Commissioner of Insurance touted huge consumer savings from the 1995 so-called tort reform legislation. We effectively debunked these claims by establishing that insurers earned over $2.8 billion in windfall profits in 1996-1998, and that consumers are not reaping the promised benefits of substantially lower insurance premiums. This windfall to insurers has been realized at the expense of consumers, and we continue to expose insurersí unjust enrichment at their expense.

Credit Insurance in Texas. CEJ continues to challenge insurance policy filings that are unfair to Texas consumers. Because of challenges that we have made, important changes have been made to policy filings in Texas that are "reference" filings that subsequent insurers will use as models. CEJ has negotiated to remove phantom coverage, eliminate minimum premims, eliminate subjective rating factors and lower rates by 10 to 20 percent.

Insurance Rate Case Intervention. CEJ intervenes in insurance rate cases on behalf of low-income consumers as a class, and our intervention makes a difference. In cases where we have not participated, the resulting rate increase has ranged from 23% to 48%! In the most recent case when CEJ participated, the Commissioner of Insurance mandated a 27% rate decrease.

Insurance Data Manual. Insurers routinely manipulate data to justify their requests for higher rates or changes in tort laws. We have been very successful in exposing these manipulations in insurance rate cases and tort reform debates and want to assist others in doing so. We have published an insurance data manual to assist consumer advocates in Texas and in other states in demystifying insurance company data.

Bringing Open Records abuses to public attention. CEJ has helped expose abuses of Open Records provisions by state agencies and bring those problems to the public attention. Some agencies routinely request Attorney General opinions on records that are clearly open to public scrutiny, and delay release of public information by requesting "reconsideration" after the Attorney General has verified that the information is public.

Publication. CEJís attorney authored a chapter on the discriminatory effects of homeowners insurance underwriting guidelines in a book on insurance redlining. The chapter received glowing reviews from the academic reviewers of the book: "Ö the single most important and interesting chapter in the book Ö provides a fascinating and extremely useful base for the industry and its regulators to re-examine some of the industryís most basic and harmful standards."

Insisting on restitution for injured consumers. CEJ uncovered an illegal underwriting practice of Farmers Insurance Co., who overcharged new insurance consumers and violated a Texas Department of Insurance rule. The Department told the company to stop the practice, but did not fine the company for breaking the rule or instruct the company to refund the overcharges to the consumers. After CEJ complained, the Department entered an order, instructing Farmers Insurance to pay over $500,000 in restitution to the injured consumers. In reviewing compliance with the new order, CEJ discovered yet another illegal underwriting guideline that resulted in overcharges to additional consumers. After CEJ complained, the Department ordered restitution to those consumers, resulting in a total of 1.25 million dollars repaid to consumers who were overcharged.

Class Actions. CEJ identified and exposed the practice of the Texas Insurance Commissioner of hurting consumer interests in class action lawsuits. The resulting Wall Street Journal story showed that the Commissionerís efforts to protect insurers and other big businesses allows wrongdoers to keep ill-gotten gains at the expense of consumers.

Discounts for automobile insurance. The Commissioner of Insurance proposed the repeal of a rule that requires insurers to provide a discount on automobile insurance for drivers who complete alcohol and drug awareness training. This training is instrumental in reducing losses and saving lives. When CEJ objected to the proposed repeal, the Commissioner changed his mind and kept the discount.

Education efforts. CEJ has successfully brought many issues to the publicís attention through the press. On the national level, CEJís economist is one of the few consumer advocates that is funded by the National Association of Insurance Commissioners (NAIC) to attend and participate in NAIC meetings. The NAIC adopts model laws and regulations that many states then adopt as the law for their state. CEJ helped draft an NAIC model law which prohibits underwriting and claims payment discrimination against victims of domestic violence by property and casualty insurers.