Texas House Bill HB3005

Texas 2011 - 82nd Regular

• Out of House Committee: 5/5/11
• Introduced: 3/10/11
• Refer: 3/17/11
• Report Pass: 4/29/11

Caption

Relating to the requirement that certain persons hold a limited property and casualty insurance license.

Impact

If enacted, HB 3005 could significantly streamline the regulatory framework for smaller insurance providers in Texas. By establishing clear premium thresholds for licensing exemptions, the bill aims to encourage more individuals to engage in the insurance market, potentially increasing competition and providing greater consumer choice. The bill is positioned as a pro-business measure, particularly for rural and small-scale operators who may struggle with the costs and complexities associated with obtaining a full insurance license.

Summary

House Bill 3005 proposes changes to the licensing requirements for individuals involved in property and casualty insurance. The bill specifically amends Section 4051.101 of the Insurance Code to exempt certain individuals from licensing requirements if the volume of business they wrote in the previous calendar year falls below specific premium thresholds. The changes aim to reduce regulatory burdens on smaller insurance entities by allowing those who generate less than $50,000 in direct premiums from farm mutual insurance policies, less than $20,000 for industrial fire insurance, and less than $40,000 for other insurers to operate without holding a limited property and casualty insurance license.

Contention

While proponents argue that the bill is a positive step towards reducing unnecessary regulatory overhead and fostering a more competitive insurance market, there may also be concerns regarding consumer protection. Critics might argue that loosening licensing requirements could lead to a decrease in service quality or oversight, potentially exposing consumers to risks if they choose to interact with underqualified insurers. Thus, the potential impact of HB 3005 on consumer rights and protections in the property and casualty insurance realm will likely be points of contention among legislators and stakeholders.