Texas House Bill HB2322

Texas 2009 - 81st Regular

Caption

Relating to notice requirements before cancellation of certain insurance coverage.

Impact

The introduction of HB2322 is set to have significant implications for the management of personal lines insurance, which includes policies such as personal automobile insurance, residential property insurance, and individual health insurance. By establishing clear rules for notification of policy cancellation, the bill seeks to minimize the risks faced by consumers who might otherwise find themselves unaware of their insurance status or exposed to coverage lapses. This may enhance consumer trust in the insurance market and encourage informed decision-making regarding the maintenance of insurance policies.

Summary

House Bill 2322 addresses notification requirements for the cancellation of certain insurance policies in Texas. Specifically, it amends the Insurance Code by adding Chapter 561, which mandates that insurers provide written notice of cancellation to policyholders for 'personal lines insurance' through certified mail. This requirement is aimed at ensuring policyholders are adequately informed prior to the cancellation of their insurance coverage, thereby promoting greater transparency and consumer protection within the insurance industry.

Contention

While the bill is primarily geared towards consumer protection, potential points of contention may arise from the insurance industry's responses to these new requirements. Insurers may express concerns regarding the additional administrative burden created by the necessity for certified mail notifications, coupled with the fear that increased transparency could lead to a higher rate of complaints or disputes concerning policy cancellations. Discussions surrounding the balance between consumer protection and regulatory burden will likely be pivotal as HB2322 progresses through the legislative process.