Texas House Bill HB3632

Texas 2019 - 86th Regular

Caption

Relating to policyholder approval for certain windstorm and hail insurance rate changes.

Impact

The introduction of HB3632 is poised to enhance consumer protection by ensuring that policyholders have a voice in major rate proposals. The requirement for policyholder approval aligns with broader efforts to foster transparency and accountability within the insurance industry, particularly in areas prone to windstorm and hail damage. As a result, it could empower consumers to influence pricing structures and potentially mitigate steep increases in their insurance premiums.

Summary

House Bill 3632 aims to modify the process by which insurance rate changes are approved within the Texas Windstorm Insurance Association. Specifically, the bill mandates that any proposed average rate change exceeding five percent can only be approved if a majority of policyholders give their consent. This legislative action is a significant shift towards increasing the involvement of policyholders in decisions that directly impact their financial commitments and risk coverage.

Contention

Despite the potential benefits, some stakeholders may resist this shift in policy. Arguments may arise concerning the feasibility of obtaining majority approval from policyholders, who might lack adequate information or interest in participating in such votes. Additionally, insurance companies might view this change as a hindrance to their ability to adjust rates swiftly in response to changing risk assessments and market conditions. Thus, while the bill supports policyholder interests, it may also evoke discussions about balancing consumer rights with insurance viability.