Texas House Bill HB879

Texas 2017 - 85th Regular

Caption

Relating to prior approval of certain residential property insurance rates of certain insurers.

Impact

The implications of HB 879 are significant for both insurance companies and policyholders. It creates a more structured timeline for the approval process, stipulating that the insurance commissioner must respond to rate filings within specific time frames, significantly increasing accountability for the regulatory authority. If the commissioner fails to act within the given timeframe, prescribed outcomes dictate whether rates can be assumed approved or deemed disapproved based on the nature of the filing. This move aims to enhance predictability in the insurance marketplace.

Summary

House Bill 879 addresses the process of prior approval for certain residential property insurance rates. The bill amends existing sections of the Insurance Code, specifically related to how insurers should file and obtain approval for their rates. Insurers proposing rates that exceed 105% of any rate they used in the previous year must submit these rates for the commissioner's approval, adding a layer of scrutiny intended to protect consumers from excessive rate increases.

Contention

Debate surrounding the bill has centered on the balance between regulation and market freedom. Proponents argue that stricter regulations on insurance rates are essential for consumer protection, ensuring that communities are not subjected to exorbitant rates that could squeeze economically vulnerable populations. Detractors, however, criticize the legislation as potentially stifling competition within the market, positing that overly stringent regulation may hinder insurers' ability to respond quickly to market conditions and could lead to reduced options for consumers over time.