Texas House Bill HB3365

Texas 2009 - 81st Regular

Caption

Relating to authorizing the commissioner of insurance to require the prior approval of residential property rates used by certain insurers.

Impact

The introduction of HB3365 is expected to have a significant impact on the state's insurance regulatory framework. By allowing the commissioner to impose these requirements, the bill could lead to greater oversight of insurance companies and their pricing strategies. This measure is particularly relevant given the volatility in the insurance market, where rate hikes can affect property owners' ability to maintain accessible insurance coverage. The bill's structure aims to prevent scenarios where customers might face sudden and steep increases in their insurance premiums, thereby protecting residents' financial interests.

Summary

House Bill 3365 seeks to empower the commissioner of insurance with the authority to require prior approval for residential property insurance rates used by certain insurers. The legislation is aimed primarily at ensuring the stability and affordability of residential property insurance in Texas, particularly in light of significant rate increases that have been recorded in the market. By stipulating that the commissioner can mandate this approval based on the insurer's market share or if a proposed rate increase exceeds a defined percentage, the bill attempts to address potential threats to the availability and affordability of insurance for homeowners across the state.

Contention

While supporters of the bill argue that it will create a fairer insurance market, critics may raise concerns regarding the potential for increased regulatory burden on insurance providers. There are apprehensions that imposing prior approval could lead to reduced competition among insurers, possibly driving some out of the market or discouraging new entrants. Additionally, questions may arise regarding how the parameters for assessing an insurer's market share will be defined and enforced, and whether the proposed measures could inadvertently lead to higher prices for consumers if insurers raise their rates to offset compliance costs.