Education begins again, said Keith Strama, as he reviewed some highlights and potential pitfalls of the 2021 Regular Legislative Session during his presentation to the annual meeting of the Texas Surplus Lines Association on Nov. 15. He also looked forward to the next regular session in 2023 when a new chairman takes over the committee that hears insurance issues in the state Senate.
Senator Kelly Hancock, R-North Richland Hills, received a committee reassignment, making way for a new chairman of the Senate Business and Commerce Committee. “Hancock understands the surplus lines industry better than any other legislator,” said Strama, TSLA lobbyist and partner in Beatty Navarre Strama in Austin.
Senator Charles Schwertner, M.D., R-Georgetown, was named chairman in Hancock’s place. Schwertner’s service in the legislature began in 2010 when he was elected to the House of Representatives. In 2012, he won a state Senate seat. He represents a 10-county region in Central and East Texas. An orthopedic surgeon, Schwertner comes from a prominent farming and ranching family.
Among the worst bills of the session was SB 249, authored by Schwertner. The proposal would have mandated that insurance for business interruption cover the lost income and operating expenses caused by business closures ordered during the pandemic.
Strama said, “It was a popular idea. We (insurance lobbyists) had to explain how bad the idea was.” The bill did not progress beyond a committee referral in the Senate.
The trucking industry, said Strama, successfully backed HB 19, which bifurcated civil trials involving commercial motor vehicle accidents. Motivation for the legislation, said Strama, came from several bad court decisions that made for a troubling marketplace for commercial haulers. “The trials were rarely about fault,” said Strama. “It was about how evil (the plaintiff attorney) could make the defendant truck driver or company.”
As passed, the legislation requires courts to review liability and compensatory damages in the first phase of the trial and exemplary or punitive damages in the second phase. The first phase of the trial can consider evidence of a defendant’s failure to comply with regulations or standards, but only if there is evidence that the failure to comply with the regulation or standard was a proximate cause of the injury being litigated.
Strama said that the bill met opposition throughout the process, as about five to 10 Republican lawyers in the legislature didn’t like it.
Legislation that removed the form and rate filing requirements for several specialty commercial property and casualty risks passed, said Strama. Bills similar to SB 1367, by Sen. Brandon Creighton, R-Conroe, with a companion by Rep. Tom Oliverson, R-Houston, have passed in several other states, said Strama. “It was inappropriate for us to oppose this deregulation,” said Strama. These lines, he said, are exempt from diligent effort.
A proposal by Rep. Mayes Middleton, R-Galveston, to require insurance contracts with school districts, municipalities and counties, to be subject to the public bid law failed. It did not get past a referral to the House Committee on County Affairs.
Opposition by insurance lobbyists to a bill that would have prohibited employment discrimination based on sexual orientation or gender identity helped stop it early in the legislative process. “Nobody does that,” said Strama. “Businesses don’t want to be accused of doing that.”
Strama said it was an example of how the insurance lobby uses its voice to help Texas businesses and industry in general. TSLA worked with the author Rep. Penny Morales Shaw, D-Houston, to discourage her from moving the legislation, he said.
Strama closed his presentation by emphasizing the importance of supporting TSLA’s political action committee with financial contributions that, in turn, support candidates who are open to hear TSLA’s positions. There are very few lawmakers who understand the surplus lines industry, he said. Fortunately, the Speaker of the House Dade Phelan, R-Orange, is a strong ally of TSLA.
“Our future depends on this industry being successful,” said Strama, adding that being a part of state policymaking is vital to the industry’s success.