Texas Senate Bill SB1151

Texas 2025 - 89th Regular

• Filed: 2/6/25
• Out of Senate Committee: 4/7/25
• Voted on by Senate: 4/16/25
• Out of House Committee: 4/30/25
• Voted on by House: 5/2/25
• Governor Action: 5/19/25

Caption

Relating to an insurer's responsibility to review and audit a third-party administrator.

Impact

The passage of SB1151 is expected to have a significant impact on the insurance industry, particularly in terms of regulatory compliance. By establishing clear audit and review requirements, the bill enhances the accountability of third-party administrators. This change may lead to improved operational standards and transparency in the insurance sector, ultimately benefiting consumers who rely on these services. The shift aims to reduce instances of mismanagement or irregularities in the administration of benefits, thus fostering a more trustworthy insurance environment.

Summary

SB1151 is a legislative bill related to the responsibilities of insurers concerning third-party administrators. The bill mandates that insurers conducting operations with more than 100 certificate holders or policyholders must perform semiannual reviews and biennial audits of the third-party administrators. The intention behind SB1151 is to enhance oversight and ensure that third-party administrators are functioning within the guidelines set forth by the insurers. This increased scrutiny is aimed at protecting consumers by holding third-party administrators accountable for their operations.

Sentiment

Overall, the sentiment surrounding SB1151 appears supportive, with a broad consensus across legislative bodies as evidenced by its unanimous votes in both the Senate and the House. The bill was passed in the Senate with a vote of 31-0 and in the House with a vote of 123-0, indicating strong bipartisan support. Lawmakers and industry stakeholders generally view this legislation as a necessary measure to strengthen compliance and protect consumer interests, reflecting a proactive approach to regulatory oversight in the insurance domain.

Contention

While there is strong support for SB1151, some concerns were raised regarding the potential burden placed on smaller insurers who may struggle with the cost and logistics of compliance with the new audit requirements. There is an ongoing debate about the balance between necessary regulation and operational flexibility, particularly for those entities with fewer resources. However, no major oppositional voices were noted during discussions, suggesting that the overall narrative surrounding the bill was constructive, focused on enhancing accountability rather than limiting operational capacity.