Texas House Bill HB2085

Texas 2013 - 83rd Regular

Caption

Relating to the use by certain insurers of forms that are not approved by the Texas Department of Insurance.

Impact

The bill impacts state laws governing the conduct of insurance providers in Texas, specifically concerning the approval process for insurance policy forms. By mandating compliance with approved forms and establishing accountability through potential financial restitution for insured individuals harmed by non-compliance, the bill aims to enhance consumer protection in the insurance market. This change signifies a more consumer-friendly approach, aiming to prevent insurance companies from using potentially misleading or harmful forms.

Summary

House Bill 2085 seeks to amend the Texas Insurance Code by placing stricter regulations on insurers who use forms that have not been approved by the Texas Department of Insurance. The bill establishes that insurers must cease the use of any non-approved forms immediately upon receiving notification of disapproval from the commissioner. Additionally, it prohibits the usage of language that seeks to deny or limit coverage based on non-approved forms.

Sentiment

General sentiment surrounding HB2085 appears to be favorable among consumer advocacy groups who see it as a necessary measure to protect consumers from insurance practices that could lead to financial harm. Insurers and some industry representatives, however, may perceive the bill as overly restrictive, potentially complicating processes for form approvals and adding compliance burdens. The complexity of insurance regulations often leads to varied opinions among stakeholders, highlighting the ongoing debate about balancing regulation and business flexibility.

Contention

Notably, there are points of contention regarding the implementation and enforcement of the bill. Critics argue that the immediate cessation of form usage upon disapproval could disrupt services and lead to confusion for both consumers and insurers. Furthermore, the financial restitution clause raises discussions about liability and the potential consequences for insurers who may inadvertently use disapproved forms. This aspect reflects broader concerns in the insurance community about regulatory burdens and compliance costs.