Bill would require insurers to provide written reasons for declination, cancellation or nonrenewal; industry asks for clarifications

Sen. Milton presented Senate Bill 1006, a Texas Department of Insurance (TDI) recommendation that would require insurers to provide a written statement explaining the precise incident, circumstance or risk factors relied on when an insurer declines, cancels or does not renew coverage. The statement would also have to identify the sources of information the insurer used and any other information the commissioner considers relevant.

Supporters said the change would improve transparency for consumers—particularly older Texans—who may not check electronic notices and who benefit from a written record they can share with family or advisors. Charles Cascio of AARP Texas testified that a clear written notice can reduce confusion, prevent coverage lapses and give policyholders time to respond or find alternative coverage.

Trade groups raised technical and implementation concerns. John Schnauz of the Insurance Council of Texas and Ward Tisdale of the National Association of Mutual Insurance Companies said they support increased clarity for nonrenewals and cancellations but asked the committee to refine how declinations (applicant denials) would operate in practice. They noted that many applicants shop through agents who obtain multiple quotes; automatically producing a written declination for every applicant could require new infrastructure and create confusing output that is not actionable for consumers. Industry witnesses asked for clarification about whether electronic notice would suffice in some cases, and some asked that workers’ compensation be exempted given its broker‑driven market.

Consumer advocates pressed to keep declination requirements intact, arguing that modern underwriting uses complex models and potentially automated tools; applicants deserve explanations. Ann Beador of Texas Appleseed urged adding reporting or a TDI study requirement to aggregate declination and nonrenewal data by ZIP code to give the legislature better statewide visibility into market availability issues. TDI deputy commissioner Mark Worman said the department collects statewide information for certain lines but that ZIP‑level and declination data are not currently collected in a uniform manner and that the department plans data‑collection improvements.

After panels and questions, the committee closed testimony and left the bill pending, with authors and stakeholders agreeing to work on technical refinements and potential reporting requirements.