BILL ANALYSIS

C.S.H.B. 5173

By: Dean

Insurance

Committee Report (Substituted)

BACKGROUND AND PURPOSE

Under current law, the Texas Department of Insurance (TDI) must use all relevant information submitted by title insurance companies and agents in annual statistical reports when fixing premium rates for title insurance. The bill author has informed the committee that a key component of this decision includes an evaluation of past data, however, this data has not always been timely or regularly submitted, sometimes lagging by two years. C.S.H.B. 5173 seeks to ensure the timely submission of all relevant and current data to TDI for future rate considerations so that TDI can make the best possible rate decision for both the title system and consumers by setting firm deadlines by which applicable agents and title companies must provide relevant statistical report data.

CRIMINAL JUSTICE IMPACT

It is the committee's opinion that this bill does not expressly create a criminal offense, increase the punishment for an existing criminal offense or category of offenses, or change the eligibility of a person for community supervision, parole, or mandatory supervision.

RULEMAKING AUTHORITY

It is the committee's opinion that this bill does not expressly grant any additional rulemaking authority to a state officer, department, agency, or institution.

ANALYSIS

C.S.H.B. 5173 amends the Insurance Code to require the Texas Department of Insurance (TDI) to issue a call for the statistical report data that each title insurance agent and each title insurance company engaged in the business of title insurance in Texas must annually submit to TDI for use in fixing premium rates as follows:

· to each title agent, not later than March 1 of each year for a statistical report due to TDI on May 1; and

· to each title company, not later than April 1 of each year for a statistical report due to TDI on June 1.

C.S.H.B. 5173 requires TDI to publish on TDI's website a compilation report summarizing those statistical reports, including information related to loss experience, expense of operation, premiums, and other material matters, as follows:

· from all title agents, not later than October 1 of each year; and

· from all title companies, not later than November 1 of each year.

C.S.H.B. 5173 requires TDI to issue a call for the annual statistical reports as soon as practicable after the bill's effective date. The bill authorizes a title insurance company or a title insurance agent to continue to charge the premium rates in effect on the bill's effective date until new rates are fixed using data from those reports.

EFFECTIVE DATE

On passage, or, if the bill does not receive the necessary vote, September 1, 2025.

COMPARISON OF INTRODUCED AND SUBSTITUTE

While C.S.H.B. 5173 may differ from the introduced in minor or nonsubstantive ways, the following summarizes the substantial differences between the introduced and committee substitute versions of the bill.

Both the introduced and the substitute require TDI to issue a call to each applicable title agent and each title company for certain required statistical report data. However, the introduced required TDI to issue the call not later than May 15 of each year for title agents and not later than July 16 of each year for title companies, whereas the substitute requires TDI to issue the call as follows:

· to each title agent not later than March 1 of each year for a statistical report due to TDI on May 1; and

· to each title company not later than April 1 of each year for a statistical report due to TDI on June 1.

The substitute revises the requirement of the introduced for TDI, not later than September 1 of each year, to publish on TDI's website a compilation report summarizing the submitted statistical reports as follows:

· specifies that the complication report must include information related to loss experience, expense of operation, premiums, and other material matters; and

· changes the deadline for TDI to publish the compilation report from not later than September 1 of each year to the following:

o for reports submitted from all title insurance agents, not later than October 1 of each year; and

o for reports submitted from all title insurance companies, not later than November 1 of each year.

The substitute includes the following provisions, which did not appear in the introduced:

· a requirement for TDI to issue a call for the annual statistical reports as soon as practicable after the bill's effective date; and

· an authorization for a title insurance company or a title insurance agent to continue to charge the premium rates in effect on the bill's effective date until new rates are fixed using data from those reports.

The substitute omits the provisions of the introduced that did the following:

· prohibited any rate ordered or adopted under the Texas Title Insurance Act that is not in effect before June 2, 2025, from becoming effective; and

· required any new rate ordered by TDI under that act to comply with the bill's provisions.