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. It outlines the applicability of the chapter, stating that it governs risk pools that mainly include political subdivisions and takes precedence over conflicting laws. The commissioner of insurance is granted the authority to adopt rules for implementing the chapter. Additionally, the bill specifies that certain insurance laws, including Title 4 and Chapter 830 of the Insurance Code, will apply to 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 a written statement clarifying 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 an explanation of any claim denials from the previous year. 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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