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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.