“It gives insurance companies some protection,” state Rep. Backers argue the changes would shield insurance companies from shareholder proposals that are not in their best interest. The bill outlines proposals that limit insurance companies from working with fossil fuels, seek greenhouse gas emission reduction or tracking, or restrict the insurance of entities based on environmental, social, or political goals.Ī Texas-based insurance company could not implement those proposals or include them in a proxy statement, under the measure. 1060) would take aim at shareholder proposals deemed political. Shareholder ProposalsĪ separate measure ( S.B. The Hartford Financial Services Group, Inc., Allstate Insurance Co., Berkshire Hathaway Specialty Insurance Co., and Progressive Corp. State Farm Mutual Automobile Insurance Co. “However, in the real world, we believe that any legislation of this type will put insurers in a Catch-22 situation, where they are forced by some states to utilize certain business models and quite possibly very different business models in other states, introducing unnecessary and potentially expensive complexities into the insurance marketplace,” Alexander said.Ĭhubb Corp. The American Property Casualty Insurance Association still opposes the bill, though it’s improved over its initial version, Lee Ann Alexander, vice president of state government relations, said in a statement. The association appreciates the changes made to ensure companies can continue to use sound actuarial principles in ratemaking, CEO Jennifer Cawley said. Groups such as the Texas Association of Life and Health Insurers are neutral on the most recent version that passed a state Senate committee last week. 833) would restrict companies from using ESG factors to charge differing rates “for essentially the same hazard.” The bill, though, would not apply to using those factors for a business purpose or if they’re relevant to risk. The ratemaking proposal initially drew concerns that the language could limit insurers from considering the risks of weather changing due to climate change or the dangers of a job in an oilfield for a worker’s comp policy. “I think if these companies are anti-Texas, then Texas should not reward them with doing business in the state,” Isaac said. The legislative proposals would address concerns that oil and gas and other industries are having an increasingly harder time getting coverage, said Jason Isaac, director of the foundation’s energy initiative, noting he supported harsher changes than those under consideration. Foundation officials were instrumental in crafting the state’s 2021 boycott law and have since pushed anti-ESG legislation in other states.įor insurance, the Texas Department of Insurance licenses and regulates companies that operate in the state. The measures have the backing of the Texas Public Policy Foundation, an influential conservative group that backs the fossil fuel industry. It’s not over until it’s over,” said Jay Thompson, a lobbyist representing the Association of Fire and Casualty Companies in Texas, which has testified as neutral on the proposals. Lawmakers revised the bill impacting how insurers set rates to clarify that companies can still use actuarial principles and consider relevant information, even if it could also be considered an ESG factor. Insurance association representatives raised concerns that initial versions of the proposals could lead to unintended consequences for an industry where business practices are based on determining risk, such as setting rates in hurricane zones or areas prone to wildfires. Greg Abbott (R), who wrote in a March letter to President Joe Biden (D) that Texas will ensure this year “that insurance companies do not hinder companies from our energy sector to placate ESG advocates.” Phil King (R), who’s sponsoring one of the bills, said at a committee hearing last week. “When institutional investors force insurers into considering subjective external factors such as ESG, both the Texas economy and its citizens will be adversely affected,” state Sen. and Valero Energy Corp., paid nearly $25 billion in state royalties and state and local taxes last fiscal year, according to the Texas Oil and Gas Association. The industry, anchored by companies such as ConocoPhillips Co.
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