Relating to a liquidity stress test for certain insurance companies.
Impact
The implementation of HB 2839 is expected to enhance the regulatory oversight of insurance companies in Texas, promoting greater financial stability in the insurance market. By requiring insurers to perform and report on liquidity stress tests annually, the bill seeks to ensure that these companies follow standardized procedures across different states. This measure is seen as a proactive approach to safeguarding the interests of policyholders and maintaining confidence in the insurance industry during times of financial stress.
Summary
House Bill 2839 aims to establish a standardized liquidity stress test framework for certain insurance companies, primarily focusing on life insurers. This legislation is driven by recommendations from the Texas Department of Insurance (TDI) and aligns with the models proposed by the National Association of Insurance Commissioners (NAIC). The bill amends the existing holding company acts and mandates annual reports from insurers, ensuring they demonstrate adequate liquidity to handle potential crises, similar to the financial challenges faced during the 2008 liquidity crisis. Representative Smithy, the bill's sponsor, emphasized its intent to prevent liquidity issues that could jeopardize the financial stability of insurers operating within Texas.
Sentiment
The sentiment surrounding HB 2839 appears to be largely positive, with broad support indicated during legislative discussions and voting. The bill passed with an overwhelming majority in both the House and Senate, suggesting that stakeholders view it as a necessary step towards enhanced regulatory standards in the insurance sector. However, there may still be concerns regarding the additional regulatory burden on insurers and how these new requirements will be effectively implemented without unforeseen complications.
Contention
While there seems to be little opposition to HB 2839, discussions revealed a potential area of contention regarding the adequacy of the proposed stress testing framework. Critics may argue that imposing rigorous standards could strain smaller insurance providers who might lack the resources to comply fully. Nevertheless, the consensus during committee hearings was that the benefits of preventing liquidity crises outweigh the potential drawbacks of increased regulatory demands.
Data calls authorized, group capital calculations established for insurers, insurers required to complete a NAIC liquidity stress test, insurers required to file group capital calculations and results from the NAIC liquidity stress test, insurers required to secure a deposit or bond, limited long-term care insurance provided for and regulated, automobile insurance governing provisions modified, data classified, penalties provided, and technical changes made.
Authorizing the commissioner of insurance to select and announce the version of certain instructions, calculations and documents in effect for the upcoming calendar year and cause such announcement to be published in the Kansas register, allowing certain life insurers to follow health financial reports and adopting certain provisions from the national association of insurance commissioners holding company system regulatory act relating to group capital calculations and liquidity stress testing.
Authorizing the commissioner of insurance to select and announce the version of certain instructions, calculations and documents in effect for the upcoming calendar year and cause such announcement to be published in the Kansas register, allowing certain life insurers to follow health financial reports and adopting certain provisions from the national association of insurance commissioners holding company system regulatory act relating to group capital calculations and liquidity stress testing.
Resolution Granting The Claims Commissioner An Extension Of Time To Dispose Of Certain Claims Against The State Pursuant To Chapter 53 Of The General Statutes.
Resolution Granting The Claims Commissioner An Extension Of Time To Dispose Of Certain Claims Against The State Pursuant To Chapter 53 Of The General Statutes.