Texas House Bill HB2752

Texas 2023 - 88th Regular

• Filed: 2/23/23
• Out of House Committee: 4/19/23

Caption

Relating to the authority of the Texas Department of Insurance to adopt rules that implement or are based on certain environmental, social, and governance models, ratings, or standards.

Impact

The impact of HB 2752 is focused primarily on the statutory frameworks governing the insurance market in Texas. By affirming legislative control over rulemaking, the bill seeks to preserve local economic dynamics and protect businesses from what some supporters view as potential overreach by regulatory agencies acting upon external ESG metrics. This change means that stakeholders in the insurance sector will have clearer guidelines on what constitutes acceptable regulations, as these will now require direct legislative backing. This may also alleviate uncertainties related to compliance with ESG standards set forth by organizations not directly governed by the state's insurance statutes.

Summary

House Bill 2752 introduces significant changes to the authority of the Texas Department of Insurance regarding the implementation of Environmental, Social, and Governance (ESG) standards. Specifically, the bill aims to restrict the Department's ability to adopt rules based on ESG models or ratings unless such rules are expressly authorized by statute. The essence of the bill is to limit external influences from non-regulatory entities, ensuring that any significant regulations do not compromise the state's economic status or the operational agility of local businesses. This initiative seems aligned with a broader trend of addressing concerns about the rising influence of ESG considerations in regulation and corporate governance.

Sentiment

The sentiment surrounding HB 2752 appears to be cautiously supportive among certain business interests who advocate for reduced regulatory burdens. Proponents argue that limiting the Department’s power to impose ESG standards will ensure more stable and predictable business environments. Conversely, critics caution that tightening rulemaking authority might inhibit the state's ability to respond adequately to pressing environmental and social issues. Opponents express concerns that such legislation may hold back progressive measures that align with modern corporate responsibilities and sustainability, potentially putting Texas at a disadvantage in a rapidly evolving regulatory landscape.

Contention

The debate over HB 2752 reflects a key contention between enhancing regulatory oversight that factors in ESG assessments and mitigating perceived bureaucratic overreach. Supporters emphasize the need for legislative scrutiny over any rules that could adversely affect the state's economy, while detractors argue that the restrictions could undermine critical initiatives designed to foster ethical business practices and environmental sustainability. The bill's effectiveness lies in its balance between maintaining economic competitiveness and addressing the growing concerns surrounding corporate governance and environmental impacts.

Texas Constitutional Statutes Affected

Insurance Code

• Chapter 36. Department Rules And Procedures
  • Section: New Section
  • Section: New Section