According to the Legislative Budget Board (LBB), HB 3388 will have no significant fiscal implication to the State of Texas. According to the fiscal note dated April 17, 2025, any costs associated with implementing the bill—such as administrative duties placed on the Texas Department of Insurance (TDI) for rulemaking, policy oversight, or compliance verification—are expected to be manageable within the agency's existing resources. This means the legislation does not require new funding or staffing to fulfill its provisions.

Additionally, the bill is anticipated to have no fiscal impact on local governments. The legislation applies specifically to the regulation of insurance providers and does not impose any mandates or administrative burdens on cities, counties, or other political subdivisions. Thus, its financial scope is limited to the private insurance market and the state-level regulatory apparatus.

In practical terms, this fiscal neutrality likely reflects the bill’s alignment with existing regulatory structures, particularly regarding surplus lines insurance and standard group policy practices. By streamlining procedures (such as reporting requirements for surplus lines agents) and establishing clear rulemaking authority for the insurance commissioner, the bill enables implementation without the need for additional appropriations or system overhauls.

HB 3388 represents a thoughtful and largely positive step toward modernizing Texas insurance law by allowing group property and casualty insurance policies to be offered more broadly, including for personal lines. The bill promotes free-market principles by expanding consumer choice, reducing regulatory friction for surplus lines carriers, and facilitating administrative efficiencies through group coverage models. It enhances individual liberty by allowing people with preexisting relationships—such as trade groups or associations—to access group insurance products that were previously limited to large commercial risks.

The bill also takes care to maintain important consumer protections. It prohibits shared aggregate limits among group members, ensures each member receives clear policy documentation, and treats each certificate holder as if they held an individual policy for regulatory purposes. These protections help preserve fairness and individual accountability within group arrangements. Furthermore, the bill does not grow government or increase costs to taxpayers. According to the LBB, any regulatory implementation by the Texas Department of Insurance (TDI) can be absorbed with existing resources, and the bill has no fiscal impact on local governments.

However, to fully align with principles of limited government and regulatory restraint, the bill would benefit from targeted amendments. First, the rulemaking authority granted to the insurance commissioner should be more narrowly defined to avoid open-ended regulatory discretion. Providing guardrails for this authority would help ensure that future administrations do not unintentionally expand the scope of regulation beyond the bill's intent.

Second, the bill exempts individuals who help enroll members in group insurance policies from insurance licensure requirements, provided they do not earn commissions. While this aims to streamline group administration, it could unintentionally open the door to unregulated actors influencing the insurance process. A more tailored exemption, possibly with additional oversight or disclosure requirements, would strike a better balance between efficiency and accountability.

Lastly, although consumer disclosures are critical, the bill could benefit from clearer limits on the volume and frequency of mandated documentation to avoid creating undue compliance burdens—especially for small insurers or niche groups entering the market.

In summary, HB 3388 is a well-structured and timely reform that enhances insurance access and market flexibility without expanding government or imposing new costs on taxpayers. With modest amendments to narrow rulemaking authority, refine licensing exemptions, and calibrate disclosure mandates, the bill can achieve its goals while more fully adhering to limited government and free enterprise principles. Therefore, Texas Policy Research recommends that lawmakers vote YES on HB 3388 while also recommending they consider amendments as described above.

• Individual Liberty: The bill strengthens individual liberty by giving people more freedom to choose how they access insurance coverage. Under current law, group property and casualty insurance is mostly limited to large commercial entities. HB 3388 opens this model to individuals connected by legitimate associations or affiliations, such as trade groups or professional organizations. This allows people to voluntarily join a group to access more affordable or tailored insurance options, improving personal financial flexibility. By requiring that each group member receive a copy of the policy and any applicable limits, and by treating each certificate as an individual policy for regulatory purposes, the bill ensures informed decision-making—a core component of liberty. It empowers individuals to understand and manage their risk exposure in a group context without being penalized by other members’ claims.
• Personal Responsibility: The bill encourages personal responsibility by placing the burden on both insurers and group members to be clear and informed. Members must make deliberate choices to join a group policy and accept its terms. Insurers are responsible for disclosing whether coverage limits are shared and for delivering policy documents to all members. This framework maintains accountability on both sides of the insurance relationship, which is key to a market-driven system. Additionally, the bill prohibits shared aggregate limits among certificate holders for personal lines policies, reinforcing the principle that each person’s risk should be individually assessed and borne—a strong personal responsibility safeguard.
• Free Enterprise: HB 3388 is deeply rooted in free-market expansion. It enables insurers—especially surplus lines carriers—to offer innovative group products more efficiently by reducing redundant compliance requirements, such as filing reports or conducting diligence for each individual group member. These changes encourage new insurance products and pricing models to flourish in Texas, supporting market competition and innovation. It also levels the playing field for emerging insurance models, like group-based consumer coverage, which could benefit underserved or niche markets. By modernizing outdated legal constraints, the bill fosters a more dynamic and responsive insurance market.
• Private Property Rights: The bill supports private property rights by ensuring that individuals’ coverage within a group is not diminished by the claims of others. This provision—particularly the prohibition on shared aggregate limits for personal lines—protects the insured’s property interests and ensures that contractual promises are honored individually, not diluted across the group. Additionally, by expanding access to property and casualty insurance, the bill helps more Texans protect their property against loss through affordable and accessible group coverage.
• Limited Government: HB 3388 mostly respects the principle of limited government. It does not increase state spending, expand bureaucracies, or create new entitlement programs. Regulatory implementation is to be handled within the Texas Department of Insurance’s existing structure, and the bill introduces several deregulatory elements—especially for surplus lines carriers. However, some concerns remain. The bill grants open-ended rulemaking authority to the insurance commissioner, which could lead to future regulatory overreach if not narrowly defined. It imposes new disclosure mandates and procedural requirements, which—though reasonable—slightly expand regulatory obligations for insurers. With a few targeted amendments to tighten rulemaking scope and streamline compliance, these concerns could be addressed without undermining the bill’s intent.

• SB 2596 (Same As)