According to the Legislative Budget Board (LBB), HB 3569 is not expected to have a significant fiscal implication to the state. The LBB fiscal note states that any costs associated with implementing the bill are assumed to be absorbable using existing resources. The fiscal note identifies the Texas Department of Insurance as the relevant source agency.

For local governments, the LBB likewise anticipates no significant fiscal implication. The bill regulates certain contracting practices between property and casualty insurers and licensed insurance agents, so the fiscal note does not identify any major cost driver for counties, municipalities, school districts, or other local governmental entities.

The fiscal impact therefore appears limited and administrative in nature. Based on the LBB’s analysis, any implementation responsibilities would fall primarily on existing state insurance regulatory resources, with no identified need for additional appropriations, new fees, or local government expenditures.

Texas Policy Research recommends that lawmakers vote NO on HB 3569 unless amended as described below. HB 3569 is intended to address concerns that property and casualty insurers may decline, terminate, suspend, or refuse to renew agent contracts based on book size, direct written premium, or claims volume, potentially disrupting customer coverage and forcing agencies to move customers to policies that may differ in price or coverage. The bill analysis frames the measure as a response to insurer practices that can affect agents and policyholders, and the bill would prohibit certain contract refusals, terminations, suspensions, and nonrenewals involving non-captive licensed agents.

The bill does not appear to grow government in the most direct institutional sense. The bill analysis states that it does not expressly grant additional rulemaking authority to a state officer, department, agency, or institution, and the LBB fiscal note anticipates no significant fiscal implication to the state. However, the bill does expand the scope of government by placing new statutory limits on private insurer-agent contracting decisions. A licensed agent’s authority to write a line of insurance should establish legal eligibility to operate in the market, but it should not automatically create a state-backed expectation of contracting with a private insurer. By regulating the reasons an insurer may refuse, terminate, suspend, or decline to renew a contract, the bill moves state law further into private commercial decision-making.

The bill does not appear to increase the taxpayer burden in a significant or direct way. According to the LBB, no significant fiscal implication to the state is anticipated, any costs are assumed absorbable within existing resources, and no significant fiscal implication to local governments is anticipated. That said, the absence of a major fiscal note does not eliminate the limited-government concern. The bill may still create indirect administrative costs if disputes arise over whether an insurer’s stated reason for refusing or ending a contract was permissible, even if those costs are expected to be handled within existing agency capacity.

The clearest concern is the bill’s regulatory burden on businesses. Direct written premium and loss experience are central business and risk-management metrics for property and casualty insurers. Prohibiting insurers from using those metrics as a basis for contracting decisions could restrict how insurers manage distribution networks, evaluate agent performance, control exposure, respond to market conditions, or protect solvency. The bill analysis confirms that the measure would prohibit insurers from refusing to contract with certain state-licensed property and casualty agents and from terminating, suspending, or refusing to enter into or renew a contract based on direct written premium or associated insurer losses. That structure imposes a new compliance obligation on insurers and may lead to more formalized documentation, legal review, and dispute risk around agent appointments.

For these reasons, the bill should be narrowed to address arbitrary, retaliatory, or bad-faith termination of existing agent contracts without creating a practical entitlement to insurer appointments or preventing insurers from relying on objective business criteria. Recommended amendments should remove any requirement that an insurer contract with every otherwise eligible non-captive licensed agent; preserve insurer discretion to use actuarially relevant data, loss experience, premium volume, compliance history, consumer-service performance, fraud prevention, solvency concerns, market withdrawal, and documented business standards; and limit any remedy to clearly defined conduct that is arbitrary, retaliatory, or inconsistent with the written contract. This approach would address the policy concern identified by the bill author while reducing the bill’s expansion of government scope and its regulatory burden on private insurance markets.

This is the bill’s most significant liberty concern. The bill would impose a new regulatory restriction on property and casualty insurers’ contracting decisions, including a prohibition on refusing to enter into contracts with certain licensed non-captive agents. A state license should establish eligibility to participate in a regulated occupation, but it should not create a practical entitlement to a private insurer appointment. The bill interferes with private risk management, distribution strategy, performance standards, and business discretion in the insurance market.

The bill does not directly regulate land use, authorize takings, or impair physical property rights. However, it does affect the use and control of private business assets by limiting how insurers may manage contractual relationships and agency appointments. That creates a moderate property-rights concern because private contracts, business goodwill, and distribution networks are valuable business interests.

The bill weakens market accountability by limiting an insurer’s ability to consider an agent’s direct written premium or associated loss experience when deciding whether to contract with, terminate, suspend, or renew that agent. Those metrics may reflect business performance, risk exposure, or underwriting outcomes. By restricting their use, the bill shifts part of the consequence of agent performance or book composition away from private market evaluation and toward statutory protection.

The bill analysis states that the bill does not expressly grant additional rulemaking authority, and the LBB fiscal note anticipates no significant fiscal implication to the state or local governments. Even so, the bill expands the scope of government by placing new statutory limits on private commercial decision-making. It may also invite administrative or legal disputes over whether an insurer’s stated reason for refusing, terminating, suspending, or not renewing a contract was permissible.

The bill does not directly restrict personal conduct, speech, privacy, movement, or civil liberties. Its liberty impact is indirect: it limits the freedom of insurers and licensed agents to decide whether to enter into or continue a private contractual relationship on mutually agreed terms. The bill protects certain agents from contract refusals or terminations based on premium volume or associated losses, but it does so by constraining another private party’s freedom of contract.