Texas Insurer Abandons Mandatory Mediation-Arbitration Endorsement Proposal

The Texas Farm Bureau has reportedly abandoned a proposal that would have allowed insureds to relinquish their right to sue the company in the event of a claim dispute in exchange for a lower homeowners’ policy premium.  Under the proposal, insureds who opted to pre-emptively sign away the right to sue would instead have been required to engage in mandatory mediation-arbitration with Farm Bureau. You may read more about the proposal in a prior blog post.

In July, the Texas Department of Insurance held a public meeting in Austin regarding the insurer’s request.  Insurance lobbyists, consumer advocates, and attorneys offered comments at a contentious five-hour public meeting.  Last week, Texas Farm Bureau formally withdrew its proposal from consideration.  At the time, Texas Insurance Commissioner David Mattax had not yet issued a decision regarding the insurance company’s endorsement request.  Although the Farm Bureau’s mandatory mediation-arbitration endorsement proposal is now closed, it seems likely the issue will be raised again at some point in the future.

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