State Rep. Larry Taylor, one of the most well-known mustachoied Republican politicians in the Texas Legislature and the head of the Republican Caucus in the Texas House, was caught red-handed in this shocking investigative report by KHOU, a TV station in Houston. It seems that Larry Taylor, as the co-chairman of oversight of Texas Windstorm, made money to the tune of $300,000 off Texas Windstorm, the company he’s supposed to oversee as an insurance salesman in receiving commissions through the sale of Windstorm insurance policies.
That’s a pretty nice gig---being the fox in charge of overseeing the hen house. Especially when as an insurance agent, he receives a 16% commission for selling these Texas Windstorm policies. These are the highest sales commission paid by any wind pools in the entire country, and Larry Taylor defends getting these commissions, while other states that have wind pool insurance pay insurance agents just 10% in commission.
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Taylor claims the commission is because of the inefficiencies of the Texas Windstorm, and he says the system for filling out an application is so onerous---you know, having to fill out an application, go to the post office, buy a stamp, and mail it off. Taylor complains there’s no option allowed by Texas Windstorm in e-mailing an application. When asked about faxing in the application, Taylor conveniently sidestepped the question and again complained about not being able to e-mail it in.
“We can't e-mail an application,” Taylor said. “We literally have to snail mail: Type it up, put it an envelope, certify mail it, take it to the post office, stand in line, go through and have them handle it, so we can save the date on a binder.”
KHOU: Right now today, the year 2011, you cannot e-mail in an application for Texas Windstorm insurance?
TAYLOR: I'm afraid we can't. I'd love to be able to. It would be a great efficiency to help move that process along.
KHOU: Can you fax them an application?
TAYLOR: No, no, that's a technological innovation we totally skipped. We're just trying to get to the next one, which would be e-mailing.
Here’s a minor problem with what Taylor said---Texas Windstorm actually DOES accept new insurance applications online, and doesn’t force agents to go to the post office to send in these applications.
Oliver told KHOU that since 2009 Texas Windstorm does indeed accept new insurance applications online and does not force agents to go to the post office to mail them out. They do not, according to Texas Windstorm, accept renewal applications online yet because they say they need lawmakers to change the law, and allow them to do so.
Looks like Taylor was incorrect, and it’s kind of embarrassing to watch Larry Taylor make up all these excuses to explain away the conflict of interest he has as a state lawmaker in overseeing the company he’s making money from as an insurance agent. And get this—if commissions were at 10%, rather than at 16%, paying the lower sales commission would save Texas consumers $115 million over five years.
Larry Taylor did support a bill in the Texas House to reduce the commission rate from 16% to 10%, but it conveniently died in the Texas Senate. Other than supporting the bill, he never followed up on the issue of commission rates in the subcommittee hearings he co-chaired over Texas Windstorm. He never asked Jim Oliver, the general manager of Texas Windstorm, about solving the inefficiencies to lower the rate of agent commissions.
In addition, a statement released by TWIA said Taylor had not initiated any behind-the-scenes attempts to follow up on the same issue.
“Jim Oliver does not recall any communications from Rep. Taylor expressing concerns about possible inefficiencies at TWIA, as they might relate to commission rates,” said TWIA spokesperson Meg Meo.
Larrry Taylor also sponsored a bill, HB 4409, after Hurricane Ike that allowed Texas Windstorm to raise rates up to 5% on consumers every year without having to clear it with the state first. Another set of provisions in the bill stripped the Texas Insurance Commissioner of his ability to stop the rate increases in case they were unfair to Texas consumers. That’s a hell of a bill that gave unprecedented power to Texas Windstorm in increasing their rates, and Larry Taylor is a direct beneficiary of that when he sells policies from Texas Windstorm.
KHOU asked Taylor about his role in sponsoring a bill that removed powers from the commissioner to stop rate hikes he may personally benefit from as an insurance agent.
KHOU: Do you think you should have recused yourself from voting on this bill?
TAYLOR: No, I don't think I needed to recuse myself on that.
The hypocrisy of Larry Taylor never ceases to amaze. Texas consumers who buy windstorm insurance policies deserve better from their elected lawmakers like Larry Taylor.
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Disclosure: Donations will be used by the Back to Basics PAC to advocate on behalf of Texans against the hypocrisy of self-serving politicians.
written by Noelle Bell aka slinkerwink, Director of New Media