Overall Vote Recommendation

Yes

Principle Criteria

Free Enterprise

Property Rights

Personal Responsibility

Limited Government

Individual Liberty

Digest

SB 495 seeks to limit the authority of the Texas Department of Insurance (TDI) in adopting rules and regulations based on Environmental, Social, and Governance (ESG) models. The bill amends Section 36.004 of the Texas Insurance Code, explicitly prohibiting the TDI commissioner from enforcing any rule, regulation, directive, or standard that incorporates ESG considerations unless the Texas Legislature has expressly authorized its application.

ESG assessments, as defined by the bill, include environmental factors such as an entity’s response to climate change, social factors related to corporate governance, and ethical considerations that influence business decisions. By establishing this prohibition, SB 495 ensures that any ESG-related regulatory standards must first receive legislative approval rather than being imposed administratively by the insurance commissioner or outside regulatory entities such as the National Association of Insurance Commissioners.

Author

Kevin Sparks

Co-Author

Brandon Creighton

Bob Hall

Mayes Middleton

Sponsor

Dennis Paul

Contact the Author

Sen. Kevin Sparks

Capitol Phone:

Capitol Office:

EXT E1.708

E-Mail:

[email protected]

Visit Official Website

Fiscal Notes

The fiscal implications of SB 495, as analyzed by the Legislative Budget Board, indicate that the bill is not expected to have a significant fiscal impact on the state. The Texas Department of Insurance (TDI), the primary agency affected by the bill, is assumed to be able to absorb any costs associated with implementing the legislation using its existing resources. This means that no additional appropriations or staffing adjustments are anticipated as a result of the bill’s passage.

Furthermore, the analysis finds no fiscal implications for local governments, ensuring that cities, counties, and other local entities will not bear any financial burden due to changes in regulatory authority.

Vote Recommendation Notes

Texas Policy Research recommends lawmakers vote YES on SB 495 as it upholds core principles of free enterprise, limited government, and individual liberty by restricting the Texas Department of Insurance (TDI) from enforcing regulations based on Environmental, Social, and Governance (ESG) standards unless explicitly authorized by the Texas Legislature. By ensuring that ESG-based mandates cannot be imposed without legislative approval, the bill prevents regulatory overreach and maintains a market-driven approach to insurance regulation. This approach allows insurers to make business decisions based on financial risk assessments rather than politically influenced ESG criteria, thereby fostering a more competitive and efficient marketplace.

Additionally, the bill reinforces property rights and personal responsibility by allowing businesses to operate without coercive government intervention that could dictate investment or operational decisions. From a governance perspective, SB 495 enhances transparency and accountability by ensuring that regulatory decisions involving ESG standards must go through the legislative process rather than being imposed administratively. Given that the bill does not impose significant fiscal costs on the state or local governments, it effectively balances regulatory oversight with fiscal responsibility. By safeguarding the autonomy of Texas businesses and ensuring that any ESG-related policies undergo legislative scrutiny, SB 495 represents a sound policy decision that protects economic freedom and limits bureaucratic overreach.

References

Related Legislation

HB 3899 (Same As)

View Bill Text and Status