According to the Legislative Budget Board (LBB), HB 3320 is expected to have no net fiscal impact on General Revenue-related funds through the biennium ending August 31, 2027. While it does not make an appropriation, the bill creates the statutory authority needed to regulate and administer self-insurance pools for religious institutions through the Texas Department of Insurance (TDI).

The Texas Department of Insurance anticipates requiring additional staffing to implement the bill due to an estimated 12 entities seeking to form such insurance pools over four years. For fiscal years 2026 and 2027, TDI would add 1.7 full-time equivalent (FTE) positions—including legal and financial examiner roles—to oversee rulemaking, licensing, and regulatory compliance. These staff costs, totaling approximately $272,106 per year, would be offset by an equal amount of revenue generated through regulatory fees, resulting in a net fiscal impact of $0 to the Department’s Operating Account Fund 36.

From 2028 onward, staffing needs would decline to 1.0 FTE, and annual costs and corresponding revenues would decrease to about $158,784 per year. Notably, Fund 36 is self-leveling, meaning fee-based revenue is automatically adjusted to match regulatory expenses. Furthermore, the Financial Examinations Office—responsible for a portion of the implementation—is self-directed and operates independently of the legislative appropriations process, ensuring that the bill imposes no new cost on the state’s General Revenue fund.

No significant fiscal implications are expected for local governments. Overall, the bill's implementation is fiscally neutral due to fee-based cost recovery mechanisms and limited long-term staffing needs.

HB 3320 represents a well-structured response to a growing financial burden faced by faith-based institutions in Texas. With the increasing cost and decreasing availability of property and casualty insurance, particularly for churches and nonprofit religious organizations, this bill offers a viable, community-based solution. The bill’s design draws from a proven model in Louisiana and is tailored to the Texas context with a strong emphasis on financial solvency, regulatory oversight, and operational transparency.

The proposed Religious Institutions Self-Insurance Pool would allow eligible organizations to band together and self-insure against property and liability losses, thereby lowering costs and stabilizing risk. The legislation clearly delineates that the pool is not considered an insurer under Texas law, and it avoids entangling members in state guaranty funds or excessive regulation. However, the bill ensures state oversight by empowering the Texas Department of Insurance (TDI) to approve applications, set rulemaking authority, conduct financial examinations, and enforce compliance through penalties and corrective plans.

From a liberty-oriented policy perspective, HB 3320 advances all five core principles: it reinforces individual liberty and voluntary association among religious entities; promotes personal responsibility through risk-sharing and financial obligations; encourages free enterprise by offering a market-driven alternative to commercial insurance; protects private property by ensuring insurance access; and limits government by carving out regulatory space while maintaining public accountability mechanisms. With fiscal neutrality confirmed by the Legislative Budget Board and no impact on general revenue, this bill achieves its policy goals without creating new state financial liabilities.

Given its targeted scope, careful regulatory balance, and alignment with liberty principles, Texas Policy Research recommends that lawmakers vote YES on HB 3320.

• Individual Liberty: The bill respects and enhances the freedom of religious institutions to organize their own financial and risk-sharing arrangements without interference from the state. It gives churches and religious nonprofits the legal autonomy to create a self-insurance pool outside the traditional insurance market, enabling them to manage their affairs in a manner consistent with their mission and values.
• Personal Responsibility: Each member of the insurance pool must enter into an indemnity agreement and share joint and several liability for the pool’s obligations. The bill ensures that only financially solvent entities can participate, promoting a culture of accountability. This structure relies on mutual risk-sharing, where participants are responsible for both their own well-being and that of fellow members, reinforcing a foundational tenet of responsible civic and economic behavior.
• Free Enterprise: By creating a legal mechanism for self-insurance pools specifically for religious institutions, the bill fosters innovation in the insurance market. It removes certain regulatory burdens while preserving essential consumer protections, allowing a cooperative, voluntary model to compete with traditional insurers. This encourages a freer, more dynamic marketplace without artificial government constraints.
• Private Property Rights: Religious institutions often struggle to protect their physical properties due to high insurance costs or a lack of coverage availability. The bill strengthens their ability to insure their buildings, furnishings, and liabilities through their own cooperative means. In doing so, it bolsters their capacity to safeguard their assets without relying on state-run insurance guarantees.
• Limited Government: The bill exemplifies the principle of limited government by exempting these religious pools from most provisions of the Texas Insurance Code. Oversight by the Texas Department of Insurance is appropriately restrained, limited to rulemaking, financial examinations, and enforcement where needed to ensure solvency and protect the public. This approach avoids regulatory overreach while ensuring transparency and safety.