S.B. No. 495 aims to regulate the authority of the Texas Department of Insurance regarding the adoption of rules based on environmental, social, and governance (ESG) models, ratings, or standards. The bill amends Section 36.004 of the Insurance Code by adding a new Subsection (d), which specifies that the commissioner cannot require insurers to comply with any rules or standards developed using ESG assessments unless such compliance is expressly authorized by statute. Additionally, the bill introduces Section 36.008, which defines terms related to environmental, social, and governance assessments and outlines the conditions under which rules based on these assessments may not be adopted or enforced.

The new legal language clarifies that rules developed by entities not licensed or regulated by the Texas Department of Insurance or the National Association of Insurance Commissioners cannot be enforced. It also allows individuals to challenge the adoption of rules that violate these provisions through a declaratory judgment action. The changes will only apply to proposed rules for which notice is filed after the effective date of the Act, which is set for September 1, 2025.

Statutes affected:
Introduced: Insurance Code 36.004 (Insurance Code 36)
Senate Committee Report: Insurance Code 36.004 (Insurance Code 36)
Engrossed: Insurance Code 36.004 (Insurance Code 36)
House Committee Report: Insurance Code 36.004 (Insurance Code 36)