Texas House Bill HB3994

Texas 2009 - 81st Regular

• Out of House Committee: 4/24/09

Caption

Relating to insurance agent licenses issued to certain foreign corporations and partnerships.

Impact

The implications of HB3994 on state laws are significant as it lays down more precise regulations about how foreign corporations and partnerships may participate in the Texas insurance market. By defining eligibility criteria and establishing accountability measures, the bill seeks to enhance consumer protection while allowing legitimate foreign businesses to engage in the Texas insurance sector. This balance aims to promote healthy competition and potentially improve services for consumers.

Summary

House Bill 3994 is focused on the licensing of insurance agents specifically concerning foreign corporations and partnerships. The bill amends Section 4001.106 of the Texas Insurance Code to facilitate the issuance of licenses to these entities, provided they meet certain criteria. Key requirements include having at least one licensed officer or partner, maintaining the ability to pay claims up to $25,000, and ensuring that all business locations are registered with the department. This legislation aims to streamline the licensing process and clarify the conditions under which foreign entities can operate within Texas.

Contention

While the bill simplifies the licensing framework for foreign insurers, it may raise concerns over regulatory oversight. Opponents could argue that easing restrictions might lead to challenges in ensuring that foreign entities adhere to the same standards and accountability as domestic insurers. Critics may also voice concerns about the potential risks to consumers given that the bill allows such entities to operate in Texas with fewer barriers, thereby necessitating careful monitoring by regulatory bodies.