Texas House Bill HB2414

Texas 2015 - 84th Regular

Caption

Relating to withdrawal and restriction plans for certain insurers.

Impact

This bill is expected to have a significant impact on existing and future state laws as it introduces stricter regulations on insurance providers. By requiring approval for withdrawal or restriction plans, the bill aims to prevent sudden market disruptions that could leave consumers without access to necessary coverage. It also seeks to uphold a standard that insurers cannot provide policies offering substantially less coverage than previously available, thereby protecting consumer interests and maintaining market stability.

Summary

House Bill 2414 seeks to amend parts of the Texas Insurance Code regarding withdrawal and restriction plans for certain insurers, specifically those involved in personal automobile and residential property insurance. The bill mandates that before an insurer can withdraw from writing new personal automobile or residential property insurance in response to market conditions, they must submit a proposed plan to the Texas Department of Insurance for review and approval. This allows for a more regulated approach to how insurers can operate and potentially restrict their offerings in the state.

Contention

There may be contentious points surrounding this bill, particularly regarding its implications for insurers' operational flexibility. Insurers may argue that the requirement for approval could limit their ability to respond quickly to changing conditions in the market, especially during catastrophic events. Additionally, the ability of the commissioner to impose a moratorium on new withdrawal plans for up to two years could lead to frustrations among insurers who feel hindered in their business decisions. Opponents may also raise concerns about how these regulations could affect the competitiveness of the insurance market in Texas.