Texas Senate Bill SB1379

Texas 2013 - 83rd Regular

Caption

Relating to the standard valuation for life insurance, accident and health insurance, and annuities.

Impact

The passing of SB1379 is expected to significantly impact how insurance companies in Texas compute their reserves. By allowing for a more tailored approach, insurers could potentially allocate resources more efficiently and reflect their unique risk profiles. This could enhance the competitive edge of Texas-based insurance companies, as they would be better equipped to manage their liabilities and meet their financial obligations without being bound to outdated valuation methods that may not accurately reflect current realities or risks.

Summary

SB1379 relates to the standard valuation for life insurance, accident and health insurance, and annuities, seeking to amend existing legislation in the Insurance Code of Texas. The bill emphasizes the implementation of a principle-based valuation system, which aims to improve the assessment of reserves that insurance companies must maintain to ensure they can meet their obligations to policyholders. This approach is intended to adopt more flexible valuation standards that can adapt to the specific circumstances of insurance providers, as opposed to a one-size-fits-all method.

Contention

While proponents argue that SB1379 modernizes insurance regulations and allows for more precise financial management, there is concern among consumer advocacy groups that this may lead to reduced protections for policyholders if regulations become too lax. Opponents fear that the flexibility proposed by a principle-based system might enable insurance companies to understate their liabilities, putting consumers at risk if companies fail to maintain adequate reserves. The discussions surrounding the bill indicate a tension between regulatory flexibility and accountability.