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April 25, 2017

Via hand delivery

House Committee on Insurance

Attn: The Honorable Larry Phillips, Chair
Texas State Capitol
EXT E2.150
Austin, Texas 78701

Re: Written testimony against HB 3430; legal restrictions imposed on FAIR Plan policyholders

Dear Chairman Phillips and Members of the Committee:

Texas Watch is a non-partisan, non-profit citizen advocacy organization representing over 30,000 Texans. Since 1998, we
have fought for the rights of policyholders and other consumers. We submit this written testimony today in opposition
to HB 3430 because its legal restrictions would only endanger FAIR Plan policyholders.

We fought against the legal restrictions imposed upon TWIA policyholders several years ago. This bill appears to extend
similar provisions to FAIR Plan policyholders. Direct and full access to our civil justice system is the greatest protection
policyholders have from delay, deny, underpay insurance tactics. HB 3430 represents a threat to some of our most
vulnerable policyholders. Policyholders are eligible for the FAIR Plan only if they have been twice denied by other carriers.
It provides residential property coverage for those who will not obtain it elsewhere. These policyholders are desperate for
help. They are often forced to purchase insurance by their lender, and if this bill were to pass, their state would be limiting
their legal rights for no good reason.

HB 3430 limits the time claimants have to bring a claim to just one year (Sec. 2211.158). This removes the discoverability
of the loss from the equation, attempting to paper it over with ambiguous language about good cause, dependent solely
upon the discretion of one person, the Commissioner of Insurance. We have a co-equal branch of government designed
specifically to adjudicate disputes according to well-established and carefully-considered law. Clear rules of procedure and
evidence apply in this branch of government. It is called the judiciary, not the executive. Concentrating this degree of
power in the hands of one person, in this way, violates the separation of powers that our Founders held dear.

The Founders likewise valued the right to trial to jury with the greatest regard. This legislation impairs this right in such a
way that it is gravely threatened in practice. By defining exclusive remedies and limiting available awards (Sec. 2211.172),
HB 3430 makes it likely that FAIR Plan policyholders who have been cheated will find it difficult to secure adequate legal
representation if they wish to prosecute claims. This is not the proper function of government because it does not advance
the freedom of the governed. Instead, it constrains policyholders rights and remedies. And for what purpose?

Administrative bloat and legislative fiat do not lead to good policy for our state. FAIR Plan policyholders are not served
by being subjected to a TWIA-like maze (see back). We urge you to oppose HB 3430.

Very respectfully,

Ware V. Wendell
Executive Director