Texas House Bill HB3468

Texas 2017 - 85th Regular

Caption

Relating to the disclosure of insurance company affiliates to insurance policyholders.

Impact

The bill's implications are significant as it affects all entities authorized to conduct insurance business in Texas, particularly those involved with personal automobile and residential property insurance. Insurers are now required to deliver policies within specified timeframes and to include disclosures of their affiliates with each policy issued or renewed. This creates a more regulated environment for insurance transactions, aiming to ensure that policyholders are fully aware of potential conflicts of interest or additional entities that could influence their insurance coverage.

Summary

House Bill 3468 focuses on enhancing transparency within the insurance industry by mandating that insurance companies disclose their affiliates to policyholders. This initiative seeks to provide policyholders with vital information regarding the companies associated with their insurers, fostering informed decision-making and promoting consumer trust. The bill amends Chapter 525 of the Texas Insurance Code and outlines the requirements for insurers to deliver policy documents along with clear disclosures regarding their affiliates.

Contention

Although the initiatives to increase transparency in the insurance sector are broadly supported, concerns may arise regarding the potential compliance burden placed on smaller insurance companies. Detractors argue that while transparency is necessary, the costs associated with implementing these disclosure requirements may disproportionately affect smaller firms, which may struggle with the administrative demands of the new laws. Furthermore, there might be differing opinions on how broadly the term 'affiliate' should be defined, potentially leading to debates over what constitutes necessary disclosure.