Texas House Bill HB1761

Texas 2009 - 81st Regular

• Out of House Committee: 3/16/09
• Voted on by House: 3/26/09
• Out of Senate Committee: 5/7/09
• Voted on by Senate: 5/21/09
• Governor Action: 6/19/09
• Enrolled: 5/26/09
• Passed: 6/19/09

Caption

Relating to the reserve requirements for credit life and credit accident and health insurance.

Impact

The modification in the reserve requirements is expected to enhance the financial stability of insurers by ensuring that they maintain adequate reserves based on modern mortality data. By adopting updated mortality tables, the bill seeks to provide a framework that better reflects current demographic trends and risks associated with insurance policies. This shift could potentially lead to greater reliability in the insurance market and improve consumer confidence in insurance products.

Summary

House Bill 1761 addresses reserve requirements for credit life and credit accident and health insurance within the Texas Insurance Code. The bill amends existing provisions concerning the minimum reserve requirements for policies issued before and on or after January 1, 2009. For policies issued prior to this date, the reserves are maintained at 100 percent of the 1980 Commissioner's Standard Ordinary Mortality Table, while policies issued on or after 2009 must adhere to standards established by the insurance commissioner based on contemporary mortality tables. This change aims to align reserve calculation methods with updated industry standards.

Contention

While the bill primarily aims to update and clarify reserve requirements, there may be points of contention regarding the implications of these changes for various stakeholders in the insurance industry. Insurers may view the new rules as a necessary adjustment to ensure fiscal responsibility, while some consumer advocacy groups could express concerns about the impacts on policy pricing and the long-term viability of coverage. The bill’s requirements for specific reserve computations and reports may also raise questions about compliance and administrative burdens on insurance providers.