Texas Supreme Court Says Insurance Data Should Be Public

The Texas Supreme Court has reiterated its agreement with the ruling of a lower court, saying again that state insurance data should be available to the public.

Former Texas Department of Insurance economist Birny Birnbaum, who filed suit in 1998, requested the data from the state on behalf of the Austin-based Center for Economic Justice. He was denied the information.

The data, a compilation of quarterly market reports, shows a company-by-company breakdown of information on auto insurance policies that have been canceled, sold or denied in each ZIP code area in the state. Birnbaum and other consumer advocates contend it could also show that insurance companies discriminate against minorities by charging residents in minority and low-income areas more for insurance and by denying or canceling more policies.

A district judge will decide in June if the information should be classified as a trade secret as nearly a dozen insurers involved the case contend, making it private under the state’s Public Information Act.

A lower appeals court ruled in May 1998 that the insurance department should release the requested information to Birnbaum. In March, The Supreme Court refused to reverse the decision. Just over a week ago, it denied insurance companies’ requests to reconsider the issue.

Texas Department of Insurance officials, meanwhile, have found no evidence of redlining through their investigation of the quarterly reports. And industry officials are opposed to releasing the information, claiming the information is proprietary.

“Making public how insurers market their products is one of the most anti-competitive ideas put forth in many years,” said Jerry Johns, president of Southwestern Insurance Information Service. “Were an insurer required to make public the manner in which they sell their products [it] would give an unfair advantage to competing insurers. Sharing this type of information removes the incentive for insurers to vigorously compete and would effectively put a straightjacket on any inducement to offer products [that] lower insurance rates.”

Late last year, the California Department of Insurance inadvertently released the information to Birnbaum. State Farm insurance filed a lawsuit against both Birnbaum and CDI for releasing proprietary information, including agent locations and the number of policies and service center locations sorted by ZIP code for California.

State Farm had requested Birnbaum return the information, which he refused to do. The insurer then filed a motion in Texas against Birnbaum asking a judge to make him return the information. The judge refused, but ordered him not to share the data. A similar request was filed in California, but the judge there refused to place a temporary restraining order on distributing the information to outside sources.