Texas establishes Religious Institutions Self-Insurance Pool for churches and nonprofits

Texas lawmakers have introduced House Bill 3320, a significant piece of legislation aimed at establishing a self-insurance pool for religious institutions. Introduced on February 25, 2025, the bill seeks to provide churches and nonprofit religious organizations with a viable alternative to traditional insurance, allowing them to pool resources for risk management and liability coverage.

The primary purpose of House Bill 3320 is to create the Religious Institutions Self-Insurance Pool, which will enable participating entities to share risks and costs associated with insurance. Key provisions include the establishment of a trust fund to serve as a self-insurance account, the formation of a temporary board to oversee operations, and the requirement that all participating organizations maintain a positive net worth and financial solvency.

Notably, the bill clarifies that the pool is not classified as insurance under Texas law, which means it will not be subject to the same regulations as traditional insurance providers. This distinction has sparked debates among lawmakers and stakeholders, with some expressing concerns about the potential lack of oversight and consumer protections. Proponents argue that the bill will provide much-needed financial relief to religious organizations, particularly smaller congregations that may struggle to afford conventional insurance premiums.

The implications of House Bill 3320 extend beyond financial considerations. By facilitating a self-insurance model, the bill could reshape how religious institutions manage risk, potentially leading to increased collaboration among organizations. However, critics warn that without adequate regulatory frameworks, the pool could expose participants to unforeseen liabilities.

As the legislative process unfolds, experts suggest that the bill's success will depend on addressing concerns regarding oversight and ensuring that the self-insurance pool operates transparently and effectively. If passed, House Bill 3320 could pave the way for a new era of risk management for Texas's religious institutions, offering them a sustainable solution to their insurance needs while fostering a sense of community among participating organizations.