Texas House Bill HB1992

Texas 2023 - 88th Regular

• Filed: 2/7/23

Caption

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

Impact

The impact of HB 1992 could be significant on the regulation of insurance rates within Texas. By integrating a voting mechanism for policyholders regarding rate changes, the bill seeks to enhance transparency and accountability in how insurance rates are determined. This legislative change is poised to increase the power of policyholders, enabling them to have a say in the costs associated with windstorm and hail insurance. It's a move that could potentially stabilize the rates and offer protection against excessive increases that previous management might have pursued without seeking approval from the policyholders.

Summary

House Bill 1992 aims to establish a requirement for policyholder approval before certain rate changes can be made by the Texas Windstorm Insurance Association, specifically for windstorm and hail insurance. The bill stipulates that a rate reflecting an increase greater than five percent above the existing rate can only be approved if a majority of policyholders vote in favor. This provision is intended to give policyholders a more active role in influencing decisions that directly impact their insurance rates.

Sentiment

The sentiment surrounding HB 1992 appears to be generally positive among consumer advocates and policyholder groups who argue that it strengthens consumer rights and enhances their voice in the insurance process. However, some industry stakeholders may view the bill as a challenge to swift rate adjustments needed for financial sustainability by insurance providers. The discourse around the bill reflects a common tension in insurance legislation: balancing the need for responsive rate structures with the protection of consumer interests.

Contention

Points of contention may arise regarding the feasibility and implications of requiring policyholder approval for rate changes. Critics might argue that such requirements could complicate the rate-setting process and slow down the necessary adjustments that insurance providers need to make in response to market conditions and risks. Furthermore, there might be concerns about the potential for voter apathy, leading to outcomes that do not accurately reflect the wishes of the larger policyholder population. Overall, the enactment of HB 1992 could fundamentally reshape the regulatory landscape for windstorm and hail insurance in Texas.