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Bill

HB 3899

Relating to the authority of the Texas Department of Insurance to adopt rules that implement or are based on certain environmental, social, and governance models, ratings, or standards.

89th Legislature (2025) Introduced by Dennis Paul

Texas bill restricts insurance department from adopting ESG-based regulatory rules, limiting environmental and social risk assessment in insurance operations.

Referred to Insurance
#civilremedies&liabilities(i0065) #insurance #commissionerof(v0396) #texasdepartmentof(v0006) #insurance--general(i0445)
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Bill Summary · HB 3899

Legislative bill overview

HB 3899 would restrict the Texas Department of Insurance (TDI) from adopting rules based on Environmental, Social, and Governance (ESG) models, ratings, or standards. The bill limits the department's regulatory authority to exclude ESG-based investment criteria, underwriting practices, or rating methodologies from insurance operations in Texas.

Why is this important

Insurance regulation directly affects premium costs, coverage availability, and investment practices for millions of Texans. ESG standards influence how insurers evaluate risk and manage investments, so restricting their use could reshape underwriting standards and potentially affect climate-related risk assessment in insurance products and premiums.

Potential points of contention

  • ESG definition and scope: The bill doesn't clearly define what constitutes "ESG models," creating ambiguity about whether standard risk assessment practices (like climate data for property insurance) would be prohibited.
  • Federal compliance: Insurers operating nationally must comply with federal regulations that may incorporate ESG considerations; state-level restrictions could create compliance conflicts.
  • Climate risk assessment: Prohibiting ESG-based rules may limit insurers' ability to use environmental data when pricing property/casualty insurance in flood or wildfire-prone areas, potentially affecting risk accuracy.

Compiled from official sources — confirm details with the bill’s official record.

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