In recent years, Texas homeowners and drivers paid an estimated $4 billion in overcharges to big insurance companies. This was their pay back for success in Texas pay-to-play politics.
Big corporate interests have historically enjoyed excessive influence over state government through elected and appointed officials of both political parties. However, there have been periods of populist insurance reform, most recently in the early 1990’s, under Gov. Ann Richards; after she was elected on an insurance reform message in her campaign. That was the last time the Texas Department of Insurance was up for Sunset Review and modest pro-consumer reforms were enacted.
Hostile Takeover of State Government
In 2002 the Empire Struck Back!
Until then, the Texas House of Representative was the last branch of state government still controlled by Democrats. While Speaker Pete Laney promoted a healthy business environment in Texas, he resisted an extreme corporate agenda and tried to keep a level playing field for hard working Texas families. Laney ran the House in a bi-partisan way and stood in the way of corporate greed.
The 2002 election saw an unprecedented corporate effort to remove their last roadblock and end bipartisan state government. A scheme to unduly influence the outcome of the state House elections was cooked up, allegedly, by Tom Craddick (then Chair of the Republican Caucus in the State House), Tom Delay (since disgraced and forced to resign, but then the Republican Majority Leader in the U.S. House), the Texas Association of Business(TAB) and others.
Much has been written about this sad episode in Texas political history; investigations, litigation and indictments ensued; but the effort was successful and Tom Craddick was elected as the first Republican Speaker of the Texas House since Reconstruction.
Wholly Owned Subsidiary
Perhaps no corporate sector contributed more money to the effort to buy the Texas House of Representatives than the insurance industry. They were the big corporate donors to the illegal scheme that led to the indictments of Tom DeLay and his cronies. The leadership knew the insurance industry was a willing source of unlimited campaign funds. They took the money to grab power, and they delivered their favors to the insurance industry.
Reciprocity was swift for those in the insurance business who gave Republicans corporate funds. Immediately after taking power, Speaker Tom Craddick pushed through legislation (SB 14) “deregulating” the Homeowners insurance market and, additionally, a punitive, uncivil legal reform bill (HB 4) that punished everyday Texans while handsomely rewarding the insurance industry for its hundreds of thousands of dollars in contributions.
Tom Craddick has now been deposed as Speaker by those in his own party, but the consequences of this corruption in Austin are still hurting average Texans — in the cost of homeowner insurance, car insurance and health insurance – while the insurance industry laughs all the way to the bank.
