Texas House Bill HB1864

Texas 2019 - 86th Regular

Caption

Relating to the Texas Life and Health Insurance Guaranty Association.

Impact

The bill introduces substantial amendments to the Insurance Code, delineating the extent of coverage that policyholders can expect in the event of an insurer’s financial difficulties. This includes clear definitions of terms such as 'covered policy,' 'enrollee,' and specifics about the obligations excluded under certain conditions. Importantly, this impacts how claims are paid out and establishes a framework for the operation of the guaranty association. The adjustments enhance the insurance safety net for Texans, enabling continued access to essential health and life insurance benefits despite insurer insolvency.

Summary

House Bill 1864 relates to the Texas Life and Health Insurance Guaranty Association, primarily aimed at protecting policyholders in the event of an insurance company's impairment or insolvency. The bill facilitates the provisions under which the association provides coverage to insured individuals, ensuring that they are shielded from monetary losses due to their insurer's failure. This legislative move seeks to bolster consumer confidence in the insurance market, particularly focusing on life and health insurance policies, including annuities and health benefit plans.

Contention

While the bill aims to provide much-needed safeguards, it may also spark discussions around the associated costs for insurers, which could translate into higher premiums for consumers. Some industry stakeholders may express concerns about the financial impact of additional assessments on member insurers and the implications for competitive practices within the insurance sector. Furthermore, due to the expansive definitions and coverage limits, there could be debates regarding the adequacy of protections provided and whether the exclusions are sufficiently narrow to meet the needs of those most at risk.