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No fiscal implication to the State is anticipated.
HB 1357 would amend a few sections of the Insurance Code
that concerns for reinsurance for title insurers. Firstly, this legislation
would make changes to the maximum policy liability for a title insurer. It would
allow a title insurer to insure any property that carries a potential policy
liability of not more than 50 percent of that title insurer’s surplus of
policyholders and statutory premium reserves.
Secondly, this bill would remove many requirements for a
title insurer to reinsure policies. For example, it would remove many
provisions that require a title insurer to notify and receive authorization to
reinsure a policy from the Texas Department of Insurance (TDI) and the Commissioner
of Insurance. In other words, TDI and the commissioner would lose the authority
to permit a title insurance company to obtain reinsurance.
Currently, the regulatory burden in Texas for title insurers
is relatively high when compared with most other states. Title insurance in the
commercial real estate market is fast paced; unfortunately current laws slow
down this pace because TDI and the commissioner are heavily involved in the
process of a title insurer gaining reinsurance for commercial properties.
Additionally, the current restriction on the maximum
liability that a title insurer incurs is unnecessarily limiting. Title insurers
are not incurring liability from the actual property; it is incurring liability
from the title to that property which is generally not as high a risk as other
forms of insurance that insure the actual property.
We support SB 1357 because it would eliminate many
regulatory burdens on the title insurers so that they may operate more efficiently
in Texas. This legislation is in accordance with our free market principle and limited government principle.