Texas Senate Bill SB915

Texas 2017 - 85th Regular

Caption

Relating to captive insurance companies.

Impact

The amendments proposed in SB915 could significantly influence how captive insurance companies operate within Texas. By setting explicit rules for the formation, governance, and operation of captive exchanges, the bill aims to foster a more streamlined regulatory environment. This is anticipated to make it easier for businesses to establish their own insurance arrangements tailored to their specific risks. Moreover, it places Texas on the map as a competitive option for companies seeking to form captive insurance entities, potentially leading to increased economic activity and job creation within the insurance sector.

Summary

SB915 aims to amend the Insurance Code to address the regulatory framework for captive insurance companies in Texas. The bill introduces the concept of 'captive exchanges,' which are reciprocal or interinsurance exchanges formed under specific provisions. Notably, it outlines the requirements for the attorney in fact, who must have an established affiliation with all subscribers and a principal office in Texas. This legislative change is expected to provide a clearer operational structure for captive insurance companies and enhance the state's attractiveness as a domicile for such entities.

Contention

While supporters argue that SB915 will provide clarity and facilitate growth in the captive insurance market, there are concerns regarding the potential implications for consumer protections. Critics worry that the bill could enable companies to bypass certain regulations that typically safeguard policyholders, allowing for potentially riskier practices. The tension between fostering business and ensuring robust consumer protection is likely to be a focal point as the bill progresses through the legislative process.