Relating to the nonrenewal of, the assessment of premium surcharges against, and a study concerning loss ratios with respect to certain insurance policies.
The proposed changes could have significant implications for homeowners and property owners in Texas by limiting insurers' ability to nonrenew policies based solely on claims made within a specified period. In addition, the bill introduces a cap on the number of policy nonrenewals that insurers can impose statewide and at the county level, which will create a level of protection for policyholders against abrupt terminations of coverage. This shift has the potential to enhance stability in the insurance market by reducing the frequency of policy cancellations due to claim filings.
House Bill 1368 addresses issues related to the nonrenewal of certain insurance policies and the assessment of premium surcharges. It specifically targets the assessment criteria for insurers when they choose to refuse to renew policies based on the insured's claims history. The bill aims to amend existing provisions in the Texas Insurance Code by outlining the circumstances under which an insurer can nonrenew a policy and the conditions under which premium surcharges can be applied. A notable aspect of the bill is its emphasis on creating sound actuarial principles in assessing these surcharges potentially providing a more rational basis for insurance costs.
As with many insurance-related legislative proposals, there may be contention surrounding the balance between protecting policyholders and allowing insurers to manage risk effectively. Critics may argue that while the bill intends to provide protections for insured individuals, it could inadvertently restrict insurers from taking necessary actions to mitigate losses in an unstable insurance landscape. Additionally, concerns may arise around the adequacy of the proposed limits on nonrenewals, particularly in high-risk areas, where insurers may face greater challenges in maintaining a profitable portfolio.