The bill, H.B. No. 3899, seeks to amend the Texas Insurance Code by granting the Texas Department of Insurance the authority to adopt rules based on environmental, social, and governance (ESG) models, ratings, or standards, while also imposing restrictions on such rules. Specifically, it amends Section 36.004 by adding a new subsection (d) that prohibits the commissioner from requiring insurers to comply with any rule developed using ESG assessments unless explicitly authorized by statute. Additionally, the bill introduces Section 36.008, which defines key 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 implementing ESG models must not adversely affect the economy, productivity, employment, or health and safety of Texas residents. It also establishes that any rule developed by entities not regulated by the Texas Department of Insurance or the National Association of Insurance Commissioners cannot be adopted. Furthermore, individuals are granted the right to challenge the adoption of such rules through a declaratory judgment if they believe the rules violate the provisions set forth in this bill. The changes will take effect on September 1, 2025, and will apply only to proposed rules filed after that date.

Statutes affected:
Introduced: Insurance Code 36.004 (Insurance Code 36)