JD Key Consulting Logo
Signed Into Law
Signed May 29, 2025Effective 2025-05-29
HB1041

Regular Session

Relating to the insurable interest of certain persons providing care to individuals with disabilities in the life of those individuals.

Government Affairs & Regulatory Compliance Analysis

HB1041: Government Affairs Overview

HB1041 prohibits employees of assisted living facilities, intermediate care facilities, and group homes from holding an insurable interest (ownership or beneficiary status) in a resident's life insurance policy unless they are related by blood or marriage. While the insurance code provision applies to policies issued or renewed starting January 1, 2026, facility operators must immediately update conflict-of-interest policies to mitigate liability regarding financial exploitation of residents.

Rep. Chris Turner·House Bill·Regular Session

Moderate
Low Cost
Effective:2025-05-29
Business Impact

Who HB1041 Affects

This legislation has regulatory implications for the following Texas businesses and organizations:

Regulatory Priority: moderate

Notable regulatory updates (effective 2025-05-29). Consider how these changes may affect your operations.

🏥

Healthcare

Affected business types:

  • Hospitals
  • Healthcare systems
  • Medical practices
  • Health insurance providers
View all healthcare legislation
🏦

Banking & Finance

Affected business types:

  • Banks
  • Credit unions
  • Financial services firms
  • Insurance companies
View all banking & finance legislation

Key Operational Considerations

  • 1Admission Agreements: Add a disclaimer stating the facility prohibits staff from being named beneficiaries and assumes no liability for private financial arrangements violating this policy.
  • 2Employee Handbook: Immediately amend the Code of Conduct to explicitly prohibit soliciting or accepting beneficiary status on a resident's life insurance policy. Define this as a terminable offense.

Estimated Cost Impact

lowMinimal cost impact anticipated.

Enforcing Agencies

Need Government Relations Support?

JD Key Consulting provides government affairs and regulatory strategy services. We help businesses navigate Texas agencies, understand legislative impacts, and advocate for their interests.

Need Help Navigating This Legislation?

JD Key Consulting provides strategic guidance on Texas regulatory compliance and legislative impact for your business.

HB1041
Relating to the insurable interest of certain persons providing care to individuals with disabilities in the life of those individuals.
Moderate Urgency
Unanimous Passage
House Vote146 - 0
YEA
100% in favor146 voting
Senate Vote31 - 0
YEA
100% in favor31 voting
Cost Impact
Low
Effective
2025-05-29
Enforcing Agencies
Texas Department of Insurance
Primary Author: Rep. Chris Turner
89th Texas Legislature
jdkey.com
01

Compliance Analysis

Key implementation requirements and action items for compliance with this legislation

Implementation Timeline

  • Effective Date: May 29, 2025 (Law is currently in effect).
  • Compliance Deadline: January 1, 2026. This is the date the prohibition legally attaches to insurance policies (new or renewed). However, internal policy updates should be completed immediately to prevent surveyor citations for exploitation.
  • Agency Rulemaking: No specific rulemaking is mandated for the Texas Department of Insurance (TDI). However, expect the Health and Human Services Commission (HHSC) to interpret violations of this statute as "financial exploitation" during standard facility surveys.

Immediate Action Plan

  • Update Policies: Revise Employee Handbooks to classify non-relative beneficiary status as a prohibited Conflict of Interest immediately.
  • Audit Files: Conduct a review of all resident insurance documentation currently in your possession before Q4 2025.
  • Notify Staff: Distribute a memo explaining that this practice is now illegal under Texas law and grounds for termination.
  • Client Communication: Inform residents and guardians of the new law during the next care plan meeting or administrative review.

Operational Changes Required

Contracts

  • Employment Agreements: Update contracts for all direct care staff and management. Insert a representation and warranty clause stating the employee does not and will not hold an insurable interest in any non-relative resident.
  • Admission Agreements: Add a disclaimer stating the facility prohibits staff from being named beneficiaries and assumes no liability for private financial arrangements violating this policy.

Hiring/Training

  • Employee Handbook: Immediately amend the Code of Conduct to explicitly prohibit soliciting or accepting beneficiary status on a resident's life insurance policy. Define this as a terminable offense.
  • Verification Protocol: Establish a workflow to verify "relative" status (within the third degree of consanguinity or affinity) if an employee claims an exception. Require documentation (birth certificates, marriage licenses) before allowing the designation.

Reporting & Record-Keeping

  • Resident File Audit: Review all resident files where the facility assists with financial management or retains copies of insurance policies. Flag any policy naming a staff member.
  • Renewal Tracking: For flagged policies, note the renewal date. You must advise the resident or legal guardian to change the beneficiary prior to the first renewal on or after January 1, 2026, or the designation will be voided by law.

Fees & Costs

  • No New State Fees: There are no direct filing fees associated with this bill.
  • Operational Costs: Minimal administrative costs related to legal review of handbooks and auditing current resident files.

Strategic Ambiguities & Considerations

  • The "Indirect" Interest Trap: The statute prohibits holding an interest "directly or indirectly." This creates a regulatory gray zone regarding staff members who may attempt to use a spouse, shell LLC, or trust to bypass the prohibition. You must interpret "indirectly" broadly in your internal policies to protect the facility from exploitation claims.
  • Grandfathering Risks: Policies issued prior to January 1, 2026, and not renewed (e.g., paid-up whole life) may technically be exempt from the insurance code violation. However, relying on this technicality is dangerous. HHSC surveyors may still cite the facility for allowing financial exploitation regardless of the insurance code's technical applicability date.

Need Compliance Guidance on This Legislation?

JD Key Consulting specializes in Texas regulatory compliance strategy. Work directly with James Dickey—former Chairman of the Republican Party of Texas—to understand this bill's impact on your operations and develop an actionable compliance plan.

Schedule a Consultation

Information presented is for general knowledge only and is provided without warranty, express or implied. Consult qualified government affairs professionals and legal counsel before making compliance decisions.

02

Legislative Timeline

This bill's path through the Texas Legislature

Filed
Nov 12, 2024
Passed House
Apr 23, 2025
Passed Senate
May 16, 2025
Signed
May 29, 2025
Effective
May 29, 2025
TopicsDisabilities, Persons WithInsuranceInsurance--life & AnnuitiesMental Health & Substance AbuseOccupational RegulationOccupational Regulation--health OccupationsNursing HomesAssisted Living Facilities
03

House Authors

Rep. Chris TurnerDemocrat · Primary Author
Joint Authors
Coauthors (4)

Senate Sponsor

Sen. Judith ZaffiriniDemocrat · Primary Sponsor

Bill Text(with markup)

View bill text in multiple formats on Texas Legislature website

Fiscal NoteView Original

Related Legislation

Explore more bills from this author and on related topics

More from Rep. Chris Turner

View all bills by Rep. Chris Turner

Related by Topic

View more Disabilities, Persons With legislation
Quick Reference

Frequently Asked Questions

Common questions about HB1041

Q

What does Texas HB1041 do?

HB1041 prohibits employees of assisted living facilities, intermediate care facilities, and group homes from holding an insurable interest (ownership or beneficiary status) in a resident's life insurance policy unless they are related by blood or marriage. While the insurance code provision applies to policies issued or renewed starting January 1, 2026, facility operators must immediately update conflict-of-interest policies to mitigate liability regarding financial exploitation of residents.

Q

Who authored HB1041?

HB1041 was authored by Texas Representative Chris Turner during the Regular Session.

Q

When was HB1041 signed into law?

HB1041 was signed into law by Governor Greg Abbott on May 29, 2025.

Q

Which agencies enforce HB1041?

HB1041 is enforced by Texas Department of Insurance.

Q

How significant are the changes in HB1041?

The regulatory priority for HB1041 is rated as "moderate". Businesses and organizations should review the legislation to understand potential impacts.

Q

What is the cost impact of HB1041?

The cost impact of HB1041 is estimated as "low". This may vary based on industry and implementation requirements.

Q

What topics does HB1041 address?

HB1041 addresses topics including disabilities, persons with, insurance, insurance--life & annuities, mental health & substance abuse and occupational regulation.

Q

What are the key dates for HB1041?

Key dates for HB1041: Effective date is 2025-05-29. Consult with legal counsel regarding applicability.

Q

What are the penalties under HB1041?

HB1041 establishes the following penalties: civil/contractual penalty of Voiding of Policy Interest for Designating a non-relative caregiver (at a state supported living center, assisted living facility, intermediate care facility, or group home) as a beneficiary or owner of a life insurance policy for a resident.. Consult with legal counsel for specific applicability to your situation.

Q

Which Texas businesses are affected by HB1041?

HB1041 primarily affects insurance companies and financial institutions, healthcare providers and medical facilities. These businesses should review the legislation with their legal and compliance teams to understand potential impacts.

Need Strategic Guidance on This Legislation?

JD Key Consulting is an Austin, Texas-based government affairs firm led by James Dickey, former Chairman of the Republican Party of Texas. We specialize in Texas regulatory compliance and legislative strategy for data centers, energy, banking, and manufacturing.

Legislative data provided by LegiScanLast updated: January 11, 2026