Texas House Bill HB1402

Texas 2017 - 85th Regular

Caption

Relating to requirements regarding the withdrawal by certain insurers from the market for certain lines of insurance.

Impact

The bill amends the Insurance Code to require a withdrawal plan that not only safeguards the rights and interests of policyholders but also outlines the logistical steps that insurers must take during their withdrawal. Factors such as maintaining contractual obligations, servicing current policyholders, and adhering to statutory obligations are placed at the forefront of the withdrawal process. By doing this, the bill aims to prevent abrupt market exits that could jeopardize the stability of the insurance market in Texas and lead to negative consequences for consumers.

Summary

House Bill 1402 introduces specific requirements regarding the withdrawal of insurers from the market for certain lines of insurance, particularly focusing on property and casualty insurance. It mandates that insurers who wish to reduce their total premium volume significantly or withdraw from certain lines must file a withdrawal plan with the state insurance commissioner, ensuring that the interests of policyholders are protected. This requirement emerges in response to the need for a structured and orderly exit from the market by insurers, especially those with substantial market shares.

Contention

While the bill is designed to enhance consumer protection and ensure orderly market practices, potential points of contention may arise around the enforcement and bureaucratic implications of such plans. Insurers may argue that these requirements add to regulatory burdens, making it more challenging to operate effectively within Texas. On the other hand, consumer advocates and state regulators may view these provisions as necessary measures to uphold market integrity and protect policyholders from sudden withdrawals that could leave them without coverage.