Bill would require insurers to provide written reasons for cancellation, nonrenewal or declination; industry and consumer groups debate scope

Senate Bill 1006, introduced by Senator Milton, would require insurers to provide a statement explaining the precise incident, circumstance, or risk factors that led to a cancellation, nonrenewal or the declination of coverage, and to specify sources of information used in the decision.

Supporters, including Charles Cascio of AARP Texas and Anne Beador of Texas Appleseed, said written justifications would help older Texans and other consumers understand reasons for nonrenewal or cancellation, avoid coverage lapses and take corrective steps where possible. Cascio told the committee written notices "provide a tangible record reducing confusion and ensuring consumers fully understand the reason and timeline for cancellation." Beador recommended adding a reporting requirement for the Texas Department of Insurance (TDI) to aggregate declination and nonrenewal data by ZIP code so the legislature can track market trends; she cited a recent Federal Insurance Office study that excluded Texas because TDI did not provide the data.

Industry trade associations urged refinements. John Schnauz of the Insurance Council of Texas said insurers do and will provide reasons on request for personal lines but warned that automatic, proactive notice for every declination would require significant systems work and cost: "If you make that process automatic, then companies are going to have to invest significant resources in developing systems to communicate and aggregate that information," Schnauz said. Ward Tisdale of the National Association of Mutual Insurance Companies urged tailoring the rule to the different market structure of workers' compensation and suggested electronic notice should be permitted for many applicants.

TDI Deputy Commissioner Mark Worman testified the department collects certain statewide nonrenewal and cancellation data for personal lines but not the granular ZIP‑level declination data advocates requested; he said TDI is reviewing what data it collects and at what granularity. Worman confirmed carriers must file rating models with TDI and said regulators can request information about models, but TDI said it does not currently require a specific AI usage disclosure beyond model filings.

Industry witnesses asked the committee to exempt workers’ compensation, to allow electronic notices in many cases and to clarify the definition and operational handling of "declination." Consumer witnesses pushed to keep declinations covered and to require TDI reporting so the legislature can spot geographic gaps in coverage.

Ending: The committee heard seven public witnesses, took questions of TDI, and left SB 1006 pending with senators indicating a desire to refine definitions, electronic‑delivery rules and a possible TDI reporting requirement.