Relating to the functions of insurance holding company systems.
Impact
The bill's core provisions are aimed at enhancing the oversight of insurance companies and their holding companies by increasing transparency regarding financial transactions and potential risks that affect the insurers. Specifically, it lays out the requirements for these companies to file annual enterprise risk reports, which must identify material risks within their structure that could adversely affect the financial condition of the insurer. The proposals target the prevention of financial instability that could arise from unmonitored risks associated with holding companies and their affiliates.
Summary
House Bill 2835 seeks to amend various sections of the Texas Insurance Code concerning the operations of insurance holding company systems. It introduces new definitions, such as 'divesting person' and 'enterprise risk', and establishes guidelines for how these entities must disclose material transactions and risks to ensure the financial health of domestic insurers. By defining terms like 'divestiture', the bill clarifies the responsibilities of those who control domestic insurers when they plan to relinquish that control.
Contention
Notable points of contention arise around the balance of regulatory oversight versus operational autonomy for insurance companies. While proponents of HB 2835 argue that the bill safeguards the interests of policyholders and the general public by promoting financial transparency and stability, opponents may view it as an excessive intrusion into the affairs of insurance companies. They argue that the regulatory requirements placed on holding companies could stifle business operations and innovation within the insurance sector, potentially leading to a less competitive market.
Relating to the transfer of functions relating to the economic regulation of water and sewer service from the Public Utility Commission of Texas and the Office of Public Utility Counsel to the Water Public Utility Commission and the Office of Water Public Utility Counsel; creating a criminal offense.
Relating to the transfer and statutory novation of insurance policies from a transferring insurer to an assuming insurer through an insurance business transfer plan; authorizing fees.
Relating to state contracts with Chinese companies and investments in Chinese companies and certain companies doing business with China; authorizing a civil penalty.
The standards and management of an insurer with an insurance holding company system and the confidential treatment of investigation and examination records of insurance holding companies.
Insurance Dept., life and annuity policies, standard nonforfeiture law for individual deferred annuities, group capital calculation and stress test, providing for holding companies, duties to Commission and lead state commissioner, small company alternative valuation provision, exemptions, exemption premium based on valuation manual of NAIC, Commissioner of Insurance may regulate by rule, Secs. 27-15-28.2, 27-29-1, 27-29-3, 27-29-4, 27-29-7, 27-36A-20 am'd.
Insurance Dept., life and annuity policies, standard nonforfeiture law for individual deferred annuities, group capital calculation and stress test, providing for holding companies, duties to Commission and lead state commissioner, small company alternative valuation provision, exemptions, exemption premium based on valuation manual of NAIC, Commissioner of Insurance may regulate by rule, Secs. 27-15-28.2, 27-29-1, 27-29-3, 27-29-4, 27-29-7, 27-36A-20 am'd.