AUSTIN — Gov. Rick Perry used earthy language to express displeasure with the pace of insurance reform in a casual conversation with San Antonio lawmakers this week — and hinted he's ready to take a much tougher stand with the industry, say two legislators who were there.

Texans continue to pay the highest home insurance rates in the country despite reform efforts five years ago that have not met expectations. Perry has not ruled out making it a priority issue again next year when the Legislature meets in regular session, Perry spokeswoman Allison Castle said.

The insurance reform issue came up during a chat over burgers involving the governor, Perry's legislative director Ken Armbrister and four San Antonio Democrats — Sen. Leticia Van de Putte, Rep. David Leibowitz, Rep. Joaquin Castro and Rep. Jose Menendez.

At least twice during the discussion, Perry said he was tired of being viewed as the "whore-boy" for the insurance industry, according to Leibowitz and Castro.

"You could tell that he just felt chagrined that he had gone out on a limb before, and he apparently just felt that (insurance companies) lied to him over and over again," said Leibowitz, who brought up the subject of insurance reform while the group ate at Chris Madrid's, a San Antonio restaurant.

Perry promised insurance reform in his 2002 election campaign when soaring homeowner rates angered many Texans. The Legislature responded in 2003 with changes to regulatory laws.

"We are still more than double the national average. This was the case back in 2003 and continues to be the case today," said Alex Winslow, director of Texas Watch, a consumer advocacy group that tracks the industry.

The average Texas homeowner pays about $1,250 a year for insurance coverage, Winslow said, compared with the national average of between $600 and $700 a year.

"From a homeowner's perspective, it's been a colossal failure, with homeowners continuing to be subjected to significant overcharges by the insurance industry," Winslow said.

Perry's spokeswoman checked with Armbrister to verify that the governor used such blunt language.

"He was frustrated and shared that frustration," Castle said after consulting with Armbrister. "The governor shares the frustration of many lawmakers who feel like the efforts of insurance reform (are) now being held up in court and not benefiting Texans."

State Farm has gone to court to contest a 2003 order to lower rates by 12 percent.

Castro said Perry told the group, "I'm thinking about making 2009 the insurance reform session."

"He just said we have been working with them for a long time and they are not coming along. They are not changing," Castro said.

Van de Putte declined to discuss what she considers a private conversation. Menendez said he didn't hear Perry use the harsh language but had arrived late and was distracted by his kids.

The state's improper implementation of the "file-and-use" system is a major reason for insurance rates not dropping significantly, said industry spokesman Jerry Johns, president of Southwestern Insurance Information Service.

In states where "file-and-use" is done correctly, companies can immediately increase auto and home insurance premiums without needing prior approval by the state, he said.

"If file-and-use were being interpreted by the Texas Department of Insurance as other states have, then market forces and intense competition could stabilize and even drive down the cost of insurance," he said.

The governor's strong words about the lack of meaningful insurance reform surprised industry officials.

"We are hearing from legislators that they are getting fewer and fewer calls about insurance rates," Johns said. "We are in a transition, and things are gradually improving."

Winslow contends the wide disparity between what insurance companies are paying out in losses and what they collect in premiums means "homeowners continued to be hosed."