The bill, S.B. No. 1276, introduces Chapter 172A to the Local Government Code, which establishes regulations for risk pools primarily consisting of political subdivisions. Key provisions include the applicability of the chapter, which is limited to these specific risk pools, and the establishment of rules by the commissioner of insurance to implement the chapter. Additionally, the bill clarifies that in the event of a conflict between this chapter and other laws, this chapter will take precedence. It also outlines that certain insurance laws will apply to coverage provided by these risk pools.

Furthermore, the bill mandates that risk pools providing health or property and casualty coverage must deliver annual disclosures to their members. These disclosures include information indicating that the risk pool is not insurance and is not regulated like traditional insurers, a copy of the coverage declarations, the risk pool's budget, a financial status report, and explanations for any claim denials. The enforcement of these regulations will be managed by the commissioner of insurance and the Texas Department of Insurance, with provisions for private actions against risk pools. The new regulations will apply to contracts entered into on or after January 1, 2026, and the act will take effect on September 1, 2025.

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