Relating to certain title insurance policy liability and reinsurance requirements.
Impact
The legislation is expected to clarify existing regulations regarding title insurance, which is a crucial aspect of real estate transactions in Texas. By defining the reinsurance processes and allowing for non-admitted insurers under specific circumstances, the bill aims to strengthen the operational framework for title insurers while ensuring that companies adhere to a certain level of financial responsibility. This change could enhance the availability of title insurance products and potentially stabilize the title insurance market in Texas.
Summary
SB572, relating to certain title insurance policy liability and reinsurance requirements, amends several sections of the Texas Insurance Code. The bill focuses on the conditions under which title insurance companies can issue policies and acquire reinsurance for risks associated with real properties located in Texas. Notably, it outlines maximum policy liability limits that a company may issue and sets certain conditions under which a title insurance company can go beyond these limits by obtaining reinsurance.
Sentiment
Overall, the sentiment around SB572 appears to be neutral to positive, with supporters likely viewing it as a necessary regulatory update to keep the insurance market robust. The absence of significant opposition or contention in the voting records and discussions suggests a consensus on the need for this legislation. The legislative discussion indicates that changes are seen as beneficial for enhancing operational efficiencies in reinsurance practices.
Contention
While the bill did not indicate major contention during its passage, possible points of concern may relate to the allowance for title insurance companies to utilize non-admitted reinsurers. Some stakeholders might worry about the implications this has on consumer protection and the financial stability of the title insurance market. However, the requirement for providing prior notifications and obtaining commissioner approval could address some of these concerns.
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 funding of excess losses and operating expenses of the Texas Windstorm Insurance Association; authorizing an assessment; authorizing a surcharge.
Relating to funding of excess losses and operating expenses of the Texas Windstorm Insurance Association; authorizing an assessment, a surcharge, and an infrastructure grant.