The Texas Department of Insurance has identified several actions to protect consumers and address property and casualty insurance costs following a directive from Gov. Greg Abbott.
Abbott issued the directive on August 24, asking TDI to use its existing authority to lower insurance costs and identify additional administrative and legislative changes that could benefit policyholders.
“The average annual homeowners’ insurance premium in Texas rose 79 percent in six years,” Abbott said in a news release. “High insurance costs hit Texas families hard. I directed TDI to put consumers first, and TDI is taking action to do so.”
TDI To Address Insurance Rating Practices
TDI plans to enforce a bulletin directing insurers to account for the lower risk associated with homes that have FORTIFIED roofs when setting rates.
The agency also plans to propose a rule clarifying that insurers cannot use the age of individual components, such as a roof, to refuse to write or renew residential property coverage when state law prohibits using the age of the property for that purpose.
Another TDI bulletin addresses price optimization, which involves adjusting insurance prices to influence sales or customer retention rather than basing prices on risk or expenses. TDI said the practice already violates Texas law for products it regulates.
New Insurance Fraud Task Force Planned
TDI also plans to create an Insurance Fraud Task Force involving law enforcement agencies, anti-fraud organizations, consumers and other stakeholders.
The agency said insurance losses caused by fraud can contribute to higher costs for consumers.
TDI will also study factors driving claim costs in the commercial auto, personal auto, and homeowners insurance markets. The study will use information already available to the department and examine additional details about claims closed without payment.
The agency plans to publish the study in a concise, web-based format by the end of 2026.
TDI To Examine AI And Consumer Information
Among additional administrative actions, TDI plans to analyze how property and casualty insurers use artificial intelligence in claims handling and underwriting.
The agency said existing guidance requires human review when AI is used to make consequential decisions affecting policyholders. TDI plans to examine how insurers are currently using AI and provide an analysis before the next legislative session.
The department is also considering plain-language coverage tools, improvements to HelpInsure.com, publication of additional non-confidential financial orders, and clearer language on insurance declarations pages.
TDI said it could also publish market data earlier, collect additional insurance market information and streamline certain company applications to reduce barriers for new market participants.
Legislature Could Consider Additional Changes
TDI identified several potential legislative changes for consideration during the next session.
They include a homeowner mitigation grant program for roof fortification, allowing all auto insurers to consider moving violations when setting rates, limiting advertising expenses included in insurance rates, and delaying the effective date of certain rate filings to give TDI more time to review them.
Other proposals include requiring advance notice of renewal premiums, establishing more consistent claim deadlines, requiring insurers to provide written claim decisions, and creating a licensing or registration system for roofing contractors.
Abbott said he plans to work with lawmakers during the next legislative session on additional measures to address insurance costs and consumer protections.
TDI Commissioner Amanda Crawford’s full letter to the governor outlining these proposals can be found here.
Provided by Dallas Express
