Relating to disclosure of foreign ownership of insurers authorized to engage in the business of insurance in this state.
The proposed regulations, if enacted, would significantly alter how insurance entities report their ownership structures, increasing the level of scrutiny on foreign shareholders. The Texas Department of Insurance would be responsible for collecting these reports, which must be made available to the public online for a minimum of three years. This move is anticipated to strengthen regulatory oversight and protect consumers by ensuring that foreign entities are disclosed, mitigating risks associated with foreign control over local insurance markets.
House Bill 2144 introduces regulations aimed at enhancing the transparency of foreign ownership in entities authorized to engage in the insurance business within Texas. Specifically, the bill requires insurance entities that have issued equity securities to disclose ownership information about 'major shareholders'—defined as those who beneficially own more than 10% of any class of equity in the company. This includes individuals or entities that are residents or organized under the laws of another country, thus focusing on regulating foreign influence in Texas insurance companies.
Despite its intention to enhance transparency, HB 2144 has faced criticism concerning the potential administrative burden imposed on insurance companies to comply with these new reporting requirements. Opponents might argue that the bill could lead to increased costs and a more cumbersome regulatory environment, particularly for smaller insurers. Additionally, there might be concerns about how this information will be used and who will have access to it, raising issues around privacy and competitive advantage in the insurance marketplace.