Texas House Bill HB3364

Texas 2009 - 81st Regular

Caption

Relating to prior approval of residential property insurance rates of certain insurers.

Impact

The implementation of HB3364 is expected to significantly impact the way residential property insurance rates are determined and approved in Texas. By requiring prior approval for substantial rate hikes, the bill aims to provide greater oversight and protection for consumers against sudden and excessive rate increases. This change is designed to enhance transparency in the insurance market and ensure that any substantial rate modifications are justified and thoroughly examined before being enforced.

Summary

House Bill 3364 addresses the regulation of residential property insurance rates in Texas by introducing a mandatory prior approval process for certain insurers. Under this legislation, an insurer is prohibited from using a residential property insurance rate until that rate has been filed with and approved by the commissioner of insurance. This applies specifically to insurers whose market share in property and casualty insurance exceeds 10% of the total premiums collected in the state. Additionally, the proposed rates must be at least 7% higher than the currently effective rates to require prior approval.

Contention

Notable points of contention surrounding HB3364 involve balancing the need for consumer protection with the operational flexibility of insurance companies. Proponents argue that the bill is essential for preventing unregulated spikes in insurance costs, which can disproportionately affect vulnerable populations. Conversely, opponents may assert that such regulations could hinder insurers' ability to manage risks effectively and adapt to changing market conditions. As a result, there is ongoing debate regarding the potential long-term consequences of this legislation on the insurance market's competitiveness and stability.