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Senate approves bill requiring insurers to disclose reasons for declination, adds ESG/DEI reporting requirement
Summary
The Texas Senate passed committee substitute to Senate Bill 1,006 requiring insurers to provide written reasons when they decline, cancel or refuse to renew policies and to report quarterly data to the Texas Department of Insurance; an amendment added a requirement to disclose denials based on ESG or DEI-related scores.
The Senate passed committee substitute to Senate Bill 1,006, requiring insurers to provide written explanations when they decline, cancel or refuse to renew an insurance policy and to report quarterly data by ZIP code to the Texas Department of Insurance.
The bill’s author, Senator Middleton, said the measure “provides much needed transparency to our insurance market for policyholders in Texas.” The measure requires the written statement to specify the precise incident, circumstance or risk factor applicable to the policyholder, identify the source of information the insurer relied on, and list any other information the commissioner considers relevant.
Senator Hughes offered and the Senate adopted a floor amendment that requires reports to disclose any decision to decline to issue, cancel, or refuse to renew a policy that was based on a score measuring exposure to long‑term environmental, social or governance (ESG) risks or on diversity, equity and inclusion (DEI) factors. Senator Hughes read aloud a sample insurer letter notifying a policyholder of a nonrenewal and said, “This is not an acceptable exposure under carriers business segments guidelines,” and argued the amendment would expose whether nonrenewals were driven by non‑underwriting factors.
Members questioned how ESG and DEI factors would be identified and whether the change would duplicate existing disclosure requirements. Senator Johnson noted concerns about definitions and legitimate underwriting uses of corporate practices; Hughes responded the amendment is “about disclosure” and said it would reveal if insurers were using non‑underwriting political or demographic reasons to deny coverage.
The Hughes amendment passed on a roll call of 25 ayes and 4 nays. The committee substitute then passed to engrossment (27 ayes, 4 nays) and was finally passed by the Senate on third reading by a vote of 31–0.
The bill directs the Texas Department of Insurance to collect the required reports and, by a subsequent floor amendment, to post the quarterly reports on the department’s website.
Votes at a glance: the ESG/DEI reporting amendment (floor amendment 2) passed 25–4; passage to engrossment passed 27–4; final passage passed 31–0.
Senate action on SB 1,006 now moves the bill toward enrollment and, if enacted, would impose new disclosure and reporting duties on insurers doing business in Texas.
