Texas House Bill HB3545

Texas 2021 - 87th Regular

Caption

Relating to the applicability of certain insurance laws to certain farm mutual insurance companies.

Impact

If enacted, HB 3545 would significantly influence how farm mutual insurance companies operate within Texas. For instance, it stipulates that a farm mutual insurance company would only be subject to certain regulations if it meets conditions related to insuring properties across five or more counties, has annual premium receipts exceeding $50 million, is part of an insurance group, or acts as a fronting insurer. This tacit recognition of smaller, local insurance companies could enhance market competition while also potentially limiting oversight on larger entities that would fall under broader regulatory scrutiny.

Summary

House Bill 3545 pertains to the applicability of certain insurance laws specifically concerning farm mutual insurance companies. The bill seeks to amend the Insurance Code by establishing exemptions for these companies under certain conditions, particularly focusing on their operations across multiple counties and their revenue thresholds. The legislation delineates which entities would be exempt from specific regulatory provisions based on their insurance activities and scope of operation within the state of Texas.

Contention

Notably, the bill may raise issues regarding the adequacy of consumer protection and regulatory oversight—especially as it pertains to larger farm mutual insurance companies that may circumvent stringent regulations through these exemptions. Opponents might argue that this could lead to inconsistent application of insurance standards, thereby potentially exposing consumers to increased risk, particularly in the wake of significant weather events. Supporters, however, would contend that the bill promotes local business interests and acknowledges the unique role of farm mutuals in the state economy.