BILL ANALYSIS
Senate Research Center |
S.B. 213 |
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By: West |
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Business & Commerce |
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6/3/2025 |
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Enrolled |
AUTHOR'S / SPONSOR'S STATEMENT OF INTENT
In the fall of 2024, North Texas consumers of a particular insurance company were subjected to an outrageous forced-bundling scheme. Consumers who held policies from this insurance company for homeowners coverage were advised, in writing, that if they did not bundle their auto insurance with the same carrier, their homeowners coverage would be dropped. This practice is known as forced bundling.
Forced bundling is not illegal in Texas. Although a proposed Texas Department of Insurance rule will address this practice, it will not statutorily prohibit the practice, and the rule could be rescinded by a future commissioner.
Simply, S.B. 213 makes the practice of forced bundling illegal in Texas with regard to homeowners and automobile insurance.
Additionally, with the introduction of a committee substitute, this bill will be stronger than TDI's proposed rule, prohibiting forced bundling of both home and auto insurance, as well as farm and ranch insurance and similar lines.
(Original Author's/Sponsor's Statement of Intent)
S.B. 213 amends current law relating to prohibiting insurers from requiring the tying of residential property and personal automobile insurance policies.
RULEMAKING AUTHORITY
This bill does not expressly grant any additional rulemaking authority to a state officer, institution, or agency.
SECTION BY SECTION ANALYSIS
SECTION 1. Amends Chapter 551, Insurance Code, by adding Subchapter F, as follows:
SUBCHAPTER F. CONTINGENCY OF RESIDENTIAL PROPERTY AND PERSONAL AUTOMOBILE POLICIES
Sec. 551.251. DEFINITION. Defines "personal automobile insurance" and "residential property insurance."
Sec. 551.252. APPLICABILITY OF SUBCHAPTER. Provides that this subchapter applies to an authorized insurer writing property and casualty insurance in this state, including a county mutual insurance company, a Lloyd's plan, a reciprocal or interinsurance exchange, a farm mutual insurance company, and a fire or casualty insurance company.
Sec. 551.253. EXEMPTIONS. Provides that this subchapter does not apply to an insurance policy delivered, issued for delivery, or renewed by the Texas Windstorm Insurance Association; a flood insurance policy delivered, issued for delivery, or renewed under the National Flood Insurance Program; or a personal umbrella insurance policy.
Sec. 551.254. REQUIRED TYING OF RESIDENTIAL PROPERTY AND PERSONAL AUTOMOBILE POLICIES. (a) Provides that it is an unfair method of competition or an unfair or deceptive act or practice in business of insurance under Chapter 541 (Unfair Methods of Competition and Unfair or Deceptive Acts or Practices) to:
(1) make the issuance, delivery, or renewal of a residential property insurance policy contingent on the purchase of a personal automobile insurance policy from the same insurer or an affiliated insurer; or
(2) make the issuance, delivery, or renewal of a personal automobile insurance policy contingent on the purchase of a residential property insurance policy from the same insurer or an affiliated insurer.
(b) Prohibits a person, notwithstanding Subchapter D (Private Action for Damages), Chapter 541, or any other law, from bringing a private action against an insurer or an agent or representative of an insurer for a method, act, or practice described by this section. Provides that this subsection does not limit the authority of the attorney general to bring an action as provided by Subchapter E (Enforcement by Attorney General) or F (Class Actions by Attorney General or Private Individual), Chapter 541.
SECTION 2. Effective date: September 1, 2025.