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Senate Business & Commerce Holds Organizational Meeting February 4
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The Senate Business & Commerce Committee held an organizational meeting on Tuesday, Feb. 4. The committee heard invited testimony from the Texas Department of Insurance (TDI), Texas Windstorm Insurance Association (TWIA), and Office of Public Insurance Counsel (OPIC). Overall, the tone of the hearing focused heavily on transparency and consumer access to insurance market data.
Some key takeaways from the hearing:
- Texas market – Commissioner Cassie Brown stated that rates are stabilizing and emphasized that Texas prioritizes availability, with 99% of homeowners policies remaining in the private market. She highlighted competition as the biggest check on rates, while committee members pushed for greater transparency on insurer exits and rate trends.
- TDI initiatives – Commissioner Brown outlined three TDI initiatives: requiring insurers to provide reasons for denials, proposing a formal tying rule within the next month, and updating data collection for homeowners. She also briefly highlighted TDI’s studies on appraisal and resilience.
- TWIA – TWIA General Manager David Durden highlighted the organization's financial challenges and reliance on debt funding. Committee members questioned the denial of a 10% rate increase, with some suggesting it may have been justified. There was also discussion on reinsurance, replacement costs, and insurer assessments to ensure proportional participation in TWIA funding.
- OPIC – David Bolduc, OPIC's public counsel, endorsed the idea of additional transparency about the state of the market and offered two legislative recommendations: requiring appraisal in home and auto policies and requiring insurers using credit-based insurance scores to update these scores at least every three years.
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TDI Proposed Rule on "Tying"
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The Texas Department of Insurance (TDI) has proposed a new rule, 28 TAC Section 21.1008, prohibiting tying arrangements to prevent unfair or deceptive practices under Insurance Code Chapter 541. The rule is intended to apply broadly to all insurers and agents, including farm mutuals, county mutuals, and surplus lines insurers and agents.
The proposed rule prohibits tying arrangements in insurance, stating that companies or agents cannot require customers to buy both a residential property insurance policy and a personal auto insurance policy as a condition for purchasing either one. Failure to comply would constitute an unfair trade practice in the business of insurance, violating Insurance Code Chapter 541.
TDI issued an informal draft rule in November 2024. The Insurance Council of Texas (ICT) submitted comments emphasizing that there is no general statutory prohibition against tying and raising concerns about TDI's legal authority to adopt such a rule without explicit legislative authorization. The full rule can be found here.
TDI is accepting comments until March 24, 2025, and members may email Angie Cervantes with any feedback. The commissioner of insurance will also consider written and oral comments at a hearing on the rule on March 10, 2025.
Two bills have been filed aiming to prohibit tying practices: SB 213, filed by Sen. Royce West, and HB 2515, filed by Rep. Trey Martinez Fischer.
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DWC Adopts Telemedicine Rule
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DWC adopts a rule to allow treating doctors to perform maximum medical improvement exams by telemedicine or telehealth when there is no impairment.
Learn more on the TDI website (PDF).
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ICT in the News: Insurance Council of Texas Supports 2025 Insurance Business America's Rising Stars
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Insurance Business America
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ICT is proud to support Insurance Business America’s Rising Stars 2025, recognizing young professionals making an impact in the insurance industry. This annual ranking highlights future leaders and provides them with opportunities to enhance their careers.
Key Details:
- Open to professionals 40 or younger as of July 1, 2025.
- Candidates must work in a role that impacts the U.S. insurance industry.
- Winners will be chosen by an independent advisory panel.
- The final list will be published in July 2025.
- Entries close on March 7, 2025 – Apply here
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Texas Wildfires Are 'Ticking Time Bomb' For State's Homeowners
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Texas faces a growing wildfire threat, with experts warning that demographic growth in fire-prone areas could destabilize the state's homeowners insurance market. Texas is increasingly vulnerable but may be less prepared to handle large-scale wildfires.
Key Points:
- Texas had the second-highest number of wildfires in 2023, following California, and ranked first in 2022.
- Changing weather patterns is increasing fire risks, as rising temperatures dry out vegetation, increasing fire frequency and intensity.
- Unlike California, Texas lacks a statewide fire agency, relying instead on local and volunteer firefighters who may lack wildfire-specific training.
- A surge in population in high-risk areas is driving up insurance premiums, with Texas seeing the highest net inflow of residents into fire-prone zones.
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How much is your Texas home worth? If you pay a lot for insurance, less than you might think.
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Higher home insurance costs are making some properties unaffordable, leading to falling home values and concerns about a potential financial crisis. Experts warn that rising premiums could destabilize the housing market, particularly in areas prone to climate risks.
Key Points:
- Home insurance costs are consuming a larger portion of monthly mortgage payments, rising from 8% in past decades to over 20% today.
- Buyers in Texas are backing out of contracts due to unaffordable insurance, causing homes to sit on the market longer and prices to drop.
- Real estate experts predict property values in high-risk areas will decline by $1.5 trillion over the coming decades.
- Rising insurance costs are linked to increasing mortgage delinquencies, with foreclosures becoming more likely in climate-vulnerable areas.
- Many homeowners are unable to sell due to high insurance costs, leading to concerns about long-term economic impacts on communities.
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Americans' insurance rates are soaring and lawsuits play a significant role
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Americans are facing soaring home and auto insurance rates, driven by inflation, natural disasters, and rising repair costs. However, the insurance industry points to legal system abuse as a major but often overlooked factor behind increasing premiums.
Key Points:
- The American Property Casualty Insurance Association (APCIA) reports that excessive litigation adds a $4,200 "tort tax" to household expenses.
- Personal injury verdicts have surged by 319% in the last decade, with nuclear verdicts ($10 million or more) increasing 350% in six years.
- Legal tactics such as jury anchoring, phantom damages, and third-party litigation funding drive up costs and affect insurance affordability.
- Some states have enacted reforms to limit liability and curb legal abuses in premises liability cases.
- The rise of foreign-backed litigation funding raises concerns about national security and economic impacts, particularly in the technology sector.
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Auto Insurance Rate Hikes Expected to Slow in 2025
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Auto insurance rates will continue to rise in 2025, but at a slower pace than in recent years, according to a new report by ValuePenguin.com, a LendingTree company. Despite the slowdown, the average cost of full coverage auto insurance is expected to hit a record high of $2,101 per year.
Key Points:
- The biggest rate increases will come from American Family, Allstate, and Liberty Mutual.
- Drivers in New Jersey, Washington, and California will see the highest premium hikes, exceeding 15 percent.
- Nevada and Florida will surpass Michigan as the most expensive states for auto insurance in 2025, with annual costs exceeding $3,200.
- Drivers with traffic violations will face an average 53 percent increase in premiums, with North Carolina seeing the highest penalty at 146 percent.
- While insurance for electric vehicles is becoming more affordable, it remains 23 percent higher than for new gasoline-powered cars.
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Property-Cat Reinsurance Rates Will Stop Dropping Post-Wildfires: Execs
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RenaissanceRe expects approximately $750 million in losses from the January 2025 California wildfires, with industrywide losses estimated at $50 billion. The company anticipates these losses will halt the recent decline in property-catastrophe reinsurance rates observed at the start of the year.
Key Points:
- RenaissanceRe's estimated losses represent 1.5% of the total industry loss, and the company is prepared to meet reinsurance demand.
- CEO Kevin O’Donnell emphasized that maintaining or increasing property-catastrophe rates is necessary to continue providing coverage.
- Reinsurers will absorb losses through catastrophe excess-of-loss towers, with some California-specific insurers potentially exhausting their coverage.
- The company reported a net operating income of $2.2 billion in 2024 despite catastrophe losses, the highest in its history.
- RenaissanceRe is optimistic about casualty market improvements but has reduced exposure in underperforming general liability lines.
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Check out all things ICT!
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The Insurance Council of Texas (ICT) is on the lookout for knowledgeable and engaging speakers for our 2025 events! We are looking for experts to discuss industry trends at our upcoming gatherings, including:
- Quarterly ICT Webinar Series
- Workers' Comp Conference: September 15-16, 2025 in Austin, TX
- P&C Insurance Symposium: September 17-18, 2025 in Austin, TX
We’re seeking speakers to cover critical industry trends, topics such as:
- Emerging topics and innovations
- Legal developments affecting insurance
- AI and technology: challenges and opportunities
- Resiliency strategies for businesses and communities
- Insights on the future of the insurance industry
If you have suggested topics, would like to request a speaker or would like to present at one of ICT's events, click here to let us know.
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