Texas 2025 - 89th Regular

Texas Senate Bill SB495 Compare Versions

Version 1 (Old)

Version 2 (New)

Old	New		Differences
1	1		By: Sparks, et al. S.B. No. 495
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4	6		A BILL TO BE ENTITLED
5	7		AN ACT
6	8		relating to the authority of the Texas Department of Insurance to
7	9		adopt rules that implement or are based on certain environmental,
8	10		social, and governance models, ratings, or standards.
9	11		BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
10	12		SECTION 1. Section 36.004, Insurance Code, is amended by
11	13		amending Subsection (b) and adding Subsection (d) to read as
12	14		follows:
13	15		(b) For purposes of Subsections [Subsection] (a) and (d) of
14	16		this section and Section 36.008, a version of a rule, regulation,
15	17		directive, or standard is expressly authorized by statute if:
16	18		(1) the statute explicitly authorizes the
17	19		commissioner to adopt rules consistent with the rule, regulation,
18	20		directive, or standard; or
19	21		(2) that version is the latest version of the rule,
20	22		regulation, directive, or standard on the date that the statute was
21	23		enacted.
22	24		(d) In this subsection, "environmental assessment," "social
23	25		assessment," and "governance assessment" have the meanings
24	26		assigned by Section 36.008. Notwithstanding Subsection (c) of this
25	27		section or any other law, the commissioner may not require an
26	28		insurer to comply with a rule, regulation, directive, or standard,
27	29		including an accounting standard, adopted by the National
28	30		Association of Insurance Commissioners if the rule, regulation,
29	31		directive, or standard is developed using a model, rating, or
30	32		standard that measures and considers environmental, social, and
31	33		governance assessments unless application of the rule, regulation,
32	34		directive, or standard is expressly authorized by statute.
33	35		SECTION 2. Subchapter A, Chapter 36, Insurance Code, is
34	36		amended by adding Section 36.008 to read as follows:
35	37		Sec. 36.008. RULES IMPLEMENTING CERTAIN ENVIRONMENTAL,
36	38		SOCIAL, AND GOVERNANCE MODELS, RATINGS, AND STANDARDS PROHIBITED.
37	39		(a) In this section:
38	40		(1) "Environmental assessment" means an assessment of
39	41		the response by or vulnerability of an entity to climate change,
40	42		including the extent of the entity's exposure to harm from
41	43		climate-related factors.
42	44		(2) "Governance assessment" means an assessment of the
43	45		ethical or moral principles that influence the corporate governance
44	46		of an entity, including the structure and composition of the
45	47		governing board, ownership structure, and employee and officer pay
46	48		policy.
47	49		(3) "Social assessment" means an assessment of:
48	50		(A) the human capital management practices of an
49	51		entity, including employment practices, employee training and
50	52		development, employee safety, and the selection of suppliers and
51	53		vendors based on preferred labor standards;
52	54		(B) the potential for an entity's products to
53	55		directly or indirectly cause physical or financial harm to persons
54	56		or to identified groups of persons, including harm caused by
55	57		quality control or safety failures and the unintentional or
56	58		unauthorized release of personal identifying information held by
57	59		the entity;
58	60		(C) an entity's willingness to invest its
59	61		earnings or reserves to improve the quality and safety of the
60	62		entity's management practices and products and mitigate any
61	63		negative effect those practices and products may have on consumers
62	64		and the environment; or
63	65		(D) any other factor relating to the social
64	66		effect of the entity's practices or products, including opposition
65	67		to those practices and products and their effect on the supply
66	68		chain.
67	69		(b) This section applies only to a rule that:
68	70		(1) implements or is based on an interstate, national,
69	71		or international model, rating, or standard, including an
70	72		accounting standard, that measures and considers environmental,
71	73		social, and governance assessments;
72	74		(2) is intended to:
73	75		(A) protect the environment;
74	76		(B) evaluate the effect of a particular entity or
75	77		industry on the environment; or
76	78		(C) encourage an entity to engage in specific
77	79		activities or behaviors in response to environmental concerns; and
78	80		(3) may materially affect in an adverse manner the:
79	81		(A) economy of this state or a sector of the
80	82		economy of this state;
81	83		(B) productivity and competitiveness of an
82	84		entity doing business in this state;
83	85		(C) number of people employed in this state; or
84	86		(D) health and safety of the residents of this
85	87		state.
86	88		(c) The commissioner may not adopt or enforce a rule to
87	89		which this section applies:
88	90		(1) that was developed by an entity that is not
89	91		licensed or regulated by:
90	92		(A) the department;
91	93		(B) the National Association of Insurance
92	94		Commissioners; or
93	95		(C) an entity of this state or of the federal
94	96		government, other than an entity described by Paragraph (A) or (B),
95	97		that regulates the practice of insurance;
96	98		(2) that may affect the authority of this state to
97	99		regulate the practice of insurance in this state; and
98	100		(3) the adoption or enforcement of which is not
99	101		specifically authorized by statute.
100	102		(d) A person may file an action for declaratory judgment
101	103		challenging the adoption of a rule on the basis that the rule was
102	104		adopted in violation of this section. An action for declaratory
103	105		judgment under this section is governed by Section 2001.038,
104	106		Government Code. If the court determines that the rule was adopted
105	107		in violation of this section, the rule is invalid.
106	108		SECTION 3. The change in law made by this Act applies only
107	109		to a proposed rule for which notice is filed with the secretary of
108	110		state under Section 2001.023, Government Code, on or after the
109	111		effective date of this Act.
110	112		SECTION 4. This Act takes effect September 1, 2025.