Texas Senate Bill SB1153

Texas 2019 - 86th Regular

Caption

Relating to the Texas Life and Health Insurance Guaranty Association.

Impact

With the amendments introduced by SB1153, policyholders are assured that they will receive due benefits even if their insurance provider encounters financial difficulties. The bill specifically aims to bolster consumer protection by ensuring that claims made by policyholders will be honored up to specified limits. It also calls for the establishment of a fair assessment procedure for member insurers to fund the association, thus reinforcing the operational stability of the Texas Life and Health Insurance Guaranty Association.

Summary

SB1153 relates to the Texas Life and Health Insurance Guaranty Association, which aims to protect policyholders against the insolvency of insurance carriers. The bill amends several sections of the Texas Insurance Code to clarify and enhance coverage provisions for individuals who are beneficiaries of insurance policies in the event that their insurer becomes impaired or insolvent. It redefines terms related to covered policies and enrollees and establishes the framework for the association's operations in guaranteeing the continuation of benefits despite the financial failings of an insurer.

Sentiment

The sentiment surrounding SB1153 appears largely supportive, particularly among consumer advocacy groups and insurance policyholders who benefit from enhanced protections. Legislative discussions highlighted a consensus on the importance of safeguarding consumers from the ramifications of potential insurer insolvencies. However, some concerns were raised about the implications of continued funding and the methods used for assessments of insurers, prompting debates among member entities regarding fairness and sustainability.

Contention

Notable points of contention might focus on the potential financial burdens imposed on solvent insurers required to support the guaranty association. Some industry representatives expressed concerns about the implications of extended financial assessments, which could strain their operational capabilities. Additionally, the allocation methods for assessments, especially regarding long-term care insurance, raised questions regarding equity among different types of insurers and the necessity for transparent criteria in the assessment process.