What changed in Texas insurance law in 2025

The Texas Department of Insurance (TDI) bulletin B-0012-25 summarizes select insurance bills the 89th Legislature enacted in 2025.¹ This page covers nine of them that touch the General Lines property and casualty and life, accident and health exams. It is study material, not legal advice.

At a glance

“On or after” means policies delivered, issued for delivery or renewed on or after that date.

Change	Bill (89th Leg., 2025)	Takes effect	Applies to
TWIA funding	H.B. 36892	Sept. 1, 2025; some parts Sept. 1, 2027	Losses in catastrophe years after 20253
No required home and auto bundling	S.B. 2134	Sept. 1, 2025	No separate date in the bill4
Appraisal clause required	S.B. 4585	Sept. 1, 2025	Policies on or after Jan. 1, 20265
Written reasons for declination, cancellation and nonrenewal	H.B. 20676	Jan. 1, 2026	Applications made and policies on or after Jan. 1, 20266
Credit report updates	S.B. 16447	Sept. 1, 2025	Policies on or after Jan. 1, 20267
Widowed insureds	S.B. 12388	Sept. 1, 2025	Policies on or after Sept. 1, 20258
Life and health rebating moves to chapter 1702	H.B. 22219	Sept. 1, 2025	Policies on or after Jan. 1, 20269
Newborn enrollment window	S.B. 89610	Sept. 1, 2025	Plans on or after Jan. 1, 202610
Annuity exchange and surrender deadlines	H.B. 438611	Sept. 1, 2025	Exchanges and surrenders initiated on or after Jan. 1, 202611

TWIA funding: state financing replaces public securities

H.B. 3689 set a new payment order for TWIA losses in catastrophe years after December 31, 2025.²³ Earlier losses keep the old tiers, though TWIA may replace their public securities with state financing.³

Step	Losses before 2026	Losses after 2025
1	TWIA reserves and the catastrophe reserve trust fund3	Same3
2	Class 1 public securities, then Class 1 member assessments, up to $500 million each3	State financing arrangements, up to $1 billion3
3	Class 2 and Class 3 public securities and member assessments, up to $250 million each3	Member assessments, up to $1 billion3

The state financing is repaid by a statewide catastrophe surcharge.²¹ It applies to fire and allied lines, farm and ranch owners, residential property and the property part of commercial multiple peril policies.³

On the exam: new public securities are no longer an answer for a storm after 2025.³

No required bundling of home and auto policies

Since September 1, 2025, an insurer may not make a home policy depend on buying its or an affiliate’s auto policy, or the reverse.⁴ Section 551.254 makes this an unfair or deceptive act under chapter 541, but bars private lawsuits over it.¹² TWIA, National Flood Insurance Program and personal umbrella policies are exempt.¹²

On the exam: “we’ll write your home only if you buy our auto” is a prohibited tie-in.¹²

Appraisal clause required in home and auto policies

S.B. 458 added chapter 1813, which requires an appraisal provision in personal auto and residential property policies.⁵ It covers FAIR Plan policies but not TWIA or commercial policies, and applies to policies on or after January 1, 2026.¹³⁵ Appraisal settles only a disputed amount of loss, and the award binds both sides except for fraud, accident, material mistake or lack of authority.¹³

On the exam: appraisal answers “how much”, not “is it covered”.¹³

Written reasons for declinations, cancellations and nonrenewals

Before H.B. 2067, §§551.002 and 551.109 required a written statement of reasons only when the applicant or policyholder asked.⁶ From January 1, 2026, the statement is required whether or not anyone asks.⁶¹² For a commercial-lines declination, the notice goes to the applicant’s agent, who must tell the applicant.¹²

On the exam: from 2026 the reasons are automatic, not “on request”.⁶

Credit reports updated at least every 36 months

S.B. 1644 added §559.058 for personal lines policies delivered, issued or renewed on or after January 1, 2026.⁷ Unless an exception applies, an insurer using credit scoring must update each insured’s credit report at least every 36 months and reassess the rating.¹⁴ At renewal, the insured or agent may ask for a re-rate on a current report once in each 12-month period.¹⁴

On the exam: 36 months is the insurer’s duty, and 12 months is the limit on requested re-rates.¹⁴

Widowed insureds pay the married rate

S.B. 1238 added §544.002(d), effective September 1, 2025.⁸ An insurer may not refuse to continue coverage, limit it, or charge a different rate because the insured is widowed.¹⁵ The rate must match the married rate, even where §544.003 would otherwise allow an underwriting distinction.¹⁵

On the exam: a spouse’s death is not a lawful reason to raise a rate or drop coverage.¹⁵

Life and health rebating moved to chapter 1702

H.B. 2221 repealed §§541.056–.058 and moved the life, annuity and accident and health rebating and discrimination rules to new chapter 1702.⁹ It took effect September 1, 2025, but governs only policies and contracts delivered, issued or renewed on or after January 1, 2026.⁹

Rule	Before	Now
Rebates and inducements, life and annuities	§541.0561617	§1702.10218
Rebates and inducements, accident and health	§541.0561617	§1702.15218
$25 promotional item, educational item or courtesy	§541.058(b)(7)19	§1702.104(5) and §1702.154(3)18

Chapter 1702 also allows value-added services the policy does not specify, and noncash gifts within a limit the commissioner sets.¹⁸

On the exam: for policies from January 1, 2026, cite chapter 1702.⁹ The $25 limit is not new, because it dates from 2013.¹⁹

Newborns: 60 days to enroll

S.B. 896 extended the newborn deadlines in small and large employer health plans and multiple employer welfare arrangements.¹⁰

Rule	Before	Now (on or after Jan. 1, 2026)
Notice of birth and any required premium due by	31st day after birth10	60th day10
Newborn coverage ends, unless notice and premium arrive	32nd day10	61st day10

Section 1367.003 now also bars individual and group health policies that cover newborns from excluding or limiting initial newborn coverage before the 61st day.²⁰

On the exam: 31 days is the old Texas answer.¹

Annuity exchanges and surrenders: 30 business days

H.B. 4386 sets deadlines for annuity exchanges and surrenders initiated on or after January 1, 2026.¹¹ In an exchange, the existing insurer sends the owner a §1114.054(c) letter within 5 business days and transfers the value within 30 business days.²¹ A cash surrender is also due within 30 business days; both deadlines have exceptions, such as a contract deferral right or suspected fraud.²¹

On the exam: a late transfer or surrender owes penalty interest at 10% a year.²¹

Older rules that did not change in 2025

These rules are current, and none of them is new in 2025.

Rule	Source and year
Nonrenewal of personal auto, homeowners and the other policies in §551.102 needs 60 days’ notice (was 30)	§551.105, amended by H.B. 1900 (88th Leg., 2023), for policies on or after Jan. 1, 20242212
Cancelling personal auto on a 12-month anniversary needs 60 days’ notice (was 30)	§551.104(f), same bill22
Cancellation under §551.104(b)–(d), such as for nonpayment or a fraudulent claim, cannot take effect before the 10th day after notice is mailed	§551.104(e), unchanged since the section took effect April 1, 200516232212
A promotional item, educational item or courtesy worth $25 or less is not a rebate in life, health, annuity, auto, casualty or fire sales	S.B. 840 (83rd Leg., 2013), effective Sept. 1, 201319
P&C rebating rules in chapter 1806 and §4005.053 did not move	Neither was amended in 20252425
Licensees need 3 hours of ethics CE each renewal period (was 2)	§4004.054, amended by H.B. 4030 (87th Leg., 2021), effective Sept. 1, 202126
A temporary agent license lasts 180 days (was 90)	§4001.155, amended by H.B. 2819 and H.B. 4030 (87th Leg., 2021), for applications submitted on or after Sept. 1, 20212726
Annuity recommendations must be in the consumer’s best interest, replacing the suitability test	§1115.051, amended by H.B. 1777 (87th Leg., 2021), for annuity transactions on or after Sept. 1, 202128

StudyWren is an independent study tool and isn’t affiliated with TDI, Pearson VUE or any insurer.

Sources

1. Texas Department of Insurance, “Commissioner’s Bulletin # B-0012-25: Insurance legislation enacted during the 89th Legislature, Regular Session, 2025” (August 5, 2025; last updated 9/16/2025). https://www.tdi.texas.gov/bulletins/2025/b-0012-25.html Accessed 2026-10-21. ↩ ↩² ↩³

2. Texas Legislature, “H.B. 3689, 89th Legislature, Regular Session: Enrolled version” (2025), Secs. 1.01, 1.08, 1.09, 1.14, 1.15, 1.16, 1.17, 4.01. https://capitol.texas.gov/tlodocs/89R/billtext/html/HB03689F.htm Accessed 2026-10-21. ↩ ↩² ↩³

3. Texas Legislature, “Insurance Code Chapter 2210. Texas Windstorm Insurance Association”, §§2210.0715–.076, 2210.080–.083, 2210.6015, 2210.642 and 2210.6435, current text. https://tcss.legis.texas.gov/Docs/IN/htm/IN.2210.htm#2210.080 Accessed 2026-10-21. ↩ ↩² ↩³ ↩⁴ ↩⁵ ↩⁶ ↩⁷ ↩⁸ ↩⁹ ↩¹⁰ ↩¹¹

4. Texas Legislature, “S.B. 213, 89th Legislature, Regular Session: Enrolled version” (2025). https://capitol.texas.gov/tlodocs/89R/billtext/html/SB00213F.htm Accessed 2026-10-21. ↩ ↩² ↩³

5. Texas Legislature, “S.B. 458, 89th Legislature, Regular Session: Enrolled version” (2025). https://capitol.texas.gov/tlodocs/89R/billtext/html/SB00458F.htm Accessed 2026-10-21. ↩ ↩² ↩³ ↩⁴

6. Texas Legislature, “H.B. 2067, 89th Legislature, Regular Session: Enrolled version” (2025). https://capitol.texas.gov/tlodocs/89R/billtext/html/HB02067F.htm Accessed 2026-10-21. ↩ ↩² ↩³ ↩⁴ ↩⁵

7. Texas Legislature, “S.B. 1644, 89th Legislature, Regular Session: Enrolled version” (2025). https://capitol.texas.gov/tlodocs/89R/billtext/html/SB01644F.htm Accessed 2026-10-21. ↩ ↩² ↩³

8. Texas Legislature, “S.B. 1238, 89th Legislature, Regular Session: Enrolled version” (2025). https://capitol.texas.gov/tlodocs/89R/billtext/html/SB01238F.htm Accessed 2026-10-21. ↩ ↩² ↩³

9. Texas Legislature, “H.B. 2221, 89th Legislature, Regular Session: Enrolled version” (2025), Secs. 2, 7, 8, 9. https://capitol.texas.gov/tlodocs/89R/billtext/html/HB02221F.htm Accessed 2026-10-21. ↩ ↩² ↩³ ↩⁴ ↩⁵

10. Texas Legislature, “S.B. 896, 89th Legislature, Regular Session: Enrolled version” (2025). https://capitol.texas.gov/tlodocs/89R/billtext/html/SB00896F.htm Accessed 2026-10-21. ↩ ↩² ↩³ ↩⁴ ↩⁵ ↩⁶ ↩⁷

11. Texas Legislature, “H.B. 4386, 89th Legislature, Regular Session: Enrolled version” (2025). https://capitol.texas.gov/tlodocs/89R/billtext/html/HB04386F.htm Accessed 2026-10-21. ↩ ↩² ↩³

12. Texas Legislature, “Insurance Code Chapter 551. Practices Relating to Declination, Cancellation, and Nonrenewal of Insurance Policies”, §§551.002, 551.007, 551.102, 551.104, 551.105, 551.109, 551.253–.254, current text. https://tcss.legis.texas.gov/Docs/IN/htm/IN.551.htm Accessed 2026-10-21. ↩ ↩² ↩³ ↩⁴ ↩⁵ ↩⁶ ↩⁷

13. Texas Legislature, “Insurance Code Chapter 1813. Appraisal of Disputed Losses”, current text. https://tcss.legis.texas.gov/Docs/IN/htm/IN.1813.htm#1813.003 Accessed 2026-10-21. ↩ ↩² ↩³

14. Texas Legislature, “Insurance Code Chapter 559. Credit Scoring and Credit Information”, §559.058, current text. https://tcss.legis.texas.gov/Docs/IN/htm/IN.559.htm#559.058 Accessed 2026-10-21. ↩ ↩² ↩³

15. Texas Legislature, “Insurance Code Chapter 544. Prohibited Discrimination”, §§544.002–.003, current text. https://tcss.legis.texas.gov/Docs/IN/htm/IN.544.htm#544.002 Accessed 2026-10-21. ↩ ↩² ↩³

16. Texas Legislature, “H.B. 2922, 78th Legislature, Regular Session: Enrolled version” (2003; Insurance Code revision, effective April 1, 2005), §§541.056 and 551.104 and Sec. 28. https://capitol.texas.gov/tlodocs/78R/billtext/html/HB02922F.htm Accessed 2026-10-21. ↩ ↩² ↩³

17. Texas Legislature, House Committee on Insurance, “Bill Analysis, H.B. 2221, Committee Report (Unamended)” (89th Legislature, Regular Session, 2025). https://capitol.texas.gov/tlodocs/89R/analysis/html/HB02221H.htm Accessed 2026-10-21. ↩ ↩²

18. Texas Legislature, “Insurance Code Chapter 1702. Regulation of Certain Trade Practices”, current text. https://tcss.legis.texas.gov/Docs/IN/htm/IN.1702.htm#1702.104 Accessed 2026-10-21. ↩ ↩² ↩³ ↩⁴

19. Texas Legislature, “S.B. 840, 83rd Legislature, Regular Session: Enrolled version” (2013). https://capitol.texas.gov/tlodocs/83R/billtext/html/SB00840F.htm Accessed 2026-10-21. ↩ ↩² ↩³

20. Texas Legislature, “Insurance Code Chapter 1367. Coverage of Children”, §§1367.001 and 1367.003, current text. https://tcss.legis.texas.gov/Docs/IN/htm/IN.1367.htm#1367.003 Accessed 2026-10-21. ↩

21. Texas Legislature, “Insurance Code Chapter 1114. Replacement of Certain Life Insurance Policies and Annuities”, §§1114.0541–.0542, current text. https://tcss.legis.texas.gov/Docs/IN/htm/IN.1114.htm#1114.0541 Accessed 2026-10-21. ↩ ↩² ↩³

22. Texas Legislature, “H.B. 1900, 88th Legislature, Regular Session: Enrolled version” (2023). https://capitol.texas.gov/tlodocs/88R/billtext/html/HB01900F.htm Accessed 2026-10-21. ↩ ↩² ↩³

23. Texas Legislature, “H.B. 2018, 79th Legislature, Regular Session: Enrolled version” (2005), Sec. 11.019(a). https://capitol.texas.gov/tlodocs/79R/billtext/html/HB02018F.htm Accessed 2026-10-21. ↩

24. Texas Legislature, “Insurance Code Chapter 1806. Prohibited Practices and Rebates Related to Policies”, current text. https://tcss.legis.texas.gov/Docs/IN/htm/IN.1806.htm#1806.059 Accessed 2026-10-21. ↩

25. Texas Legislature, “Insurance Code Chapter 4005. Conduct, Disciplinary Actions, and Sanctions”, §4005.053, current text. https://tcss.legis.texas.gov/Docs/IN/htm/IN.4005.htm#4005.053 Accessed 2026-10-21. ↩

26. Texas Legislature, “H.B. 4030, 87th Legislature, Regular Session: Enrolled version” (2021), Secs. 12, 16, 24. https://capitol.texas.gov/tlodocs/87R/billtext/html/HB04030F.htm Accessed 2026-10-21. ↩ ↩²

27. Texas Legislature, “H.B. 2819, 87th Legislature, Regular Session: Enrolled version” (2021), Secs. 2, 4, 5. https://capitol.texas.gov/tlodocs/87R/billtext/html/HB02819F.htm Accessed 2026-10-21. ↩

28. Texas Legislature, “H.B. 1777, 87th Legislature, Regular Session: Enrolled version” (2021), Secs. 7, 8, 20(b), 21. https://capitol.texas.gov/tlodocs/87R/billtext/html/HB01777F.htm Accessed 2026-10-21. ↩