Is TMLT an Insurance Company?

TMLT is not an insurance company and is not supposed to be in the business of selling insurance.  They are only supposed to be in the business of purchasing insurance.  The enabling statute that limits TMLT's conduct allows it only to perform the powers set out as follows:

  Sec. 2212.054. POWERS OF TRUST. (a) A trust may:


  (1) purchase, on behalf of the members of the association that

created the trust, medical professional liability insurance,

specific excess insurance, aggregate excess insurance, and

reinsurance, as necessary in the opinion of the trustees;


  (2) purchase required risk management services; and


  (3) pay claims that arise under any deductible provisions.


  (b) A trust's investment powers and limitations are the same as

the investment powers and limitations of a state bank with trust

powers. (V.T.I.C. Art. 21.49-4, Secs. (c), (d) (part).)

If TMLT is not supposed to be in the Insurance Business, then why is it selling insurance and why does it own an insurance company?  Yes, that's true.  They have a wholly owned insurance company, Texas Medical Insurance Company.  Check it out at

You can also check out a TMLT Declarations Page and a TMLT Insurance Policy and Medefense Endorsement so you can see for yourself that TMLT is in the business of insurance when they are not supposed to be according to the enabling statute.  In addition to all that, TMLT described itself as an "independent insurer" to the US Supreme Court in the Wyeth v. Levine case.  Here is the quote on page 1 of TMLT's amicus brief:

"TMLT is an independent insurer writing professional liability policies for more than 14,000 Texas physicians and health care providers. TMLT is extensively involved in underwriting and risk management matters for the health care industry, and this requires TMLT to maintain knowledge and expertise of insurance industry standards as well as jurisprudential standards that affect liability insurance procurement and costs in Texas."

Now, when an entity is created by statute it only has the powers that are listed in the statute.  So, is TMLT allowed to lobby the Texas Legislature?  Is it allowed to promote tort reform? Look at the powers listed above.  Do you see anything in there that allows TMLT to do these things?  Well, then why does TMLT lobby and why does it promote legislation?  Well, let's take a look at TMLT's own annual reports just to confirm their bragging about their lobby efforts and their promotion of certain legislation to take our legal rights away.  Here's the annual report for 2003, where TMLT takes credit for lobbying HB 4 and Proposition 12 the most sweeping take-away of consumer rights in Texas history. And, here is the 2008 Annual Report where TMLT not only brags about its lobbying efforts but also brags about it not being regulated by the Texas Department of Insurance.

One should also note that TMLT sent out a letter three weeks prior to the vote on Proposition 12 in 2003 advocating a "yes" vote and promising an immediate drop in insurance rates.  This is outside the powers granted to it by the Texas Legislature.  Here is a transcript of Gov. Rick Perry bragging about what TMLT did when he gave a speech at the Manhattan Institute in October 2003. You can take a look at the whole transcript at the Manhattan Institute website here.

The problem of TMLT operating outside the Texas Insurance Code has been identified as a problem by the Texas Department of Insurance since at least 2003.  Here are the relevant pages from the Texas Department of Insurance Biennual Report for 2003.  Unfortunately, TMLT has been able to avoid such regulation. 

Now, not only is TMLT lobbying in Austin when it has no statutory authorization to do so, it is also lobbying in Washington.  Click here to check out the information available at on TMLT.  And, see "The Political Stench" for more details.

So how is this happening?

Next Page

Website Builder