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Signed Into Law
Signed June 20, 2025Effective 2025-06-20
HB3388

Regular Session

Relating to group property and casualty insurance policies.

Government Affairs & Regulatory Compliance Analysis

HB3388: Government Affairs Overview

HB3388 immediately bifurcates group property and casualty insurance into two distinct regulatory frameworks: Commercial Group (Chapter 2171) and Personal Lines Group (Chapter 2172). The legislation imposes a critical operational mandate requiring the delivery of the full policy wording—not just a certificate—to every individual member within 30 days, and strictly prohibits shared aggregate limits for Personal Lines groups.

Rep. Dennis Paul·House Bill·Regular Session

Critical
Low Cost
Effective:2025-06-20
Enforcing Agencies

Surplus Lines Stamping Office of Texas • Texas Department of Insurance

Business Impact

Who HB3388 Affects

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

Regulatory Priority: critical

Significant regulatory changes (effective 2025-06-20). Review with your legal and compliance teams to understand implications.

🏦

Banking & Finance

Affected business types:

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

Key Operational Considerations

  • 1Personal Lines Master Policies: You must immediately amend these to remove any shared aggregate limits; coverage limits must apply individually to each member.
  • 2Renewal Clauses: Insert provisions in Personal Lines master policies stating coverage cannot be renewed if the group size falls below 10 certificate holders.
  • 3Sales Staff (Commercial): Train staff to provide the mandatory "Shared Limit Disclosure" *during the application process*, not at binding.

Estimated Cost Impact

lowMinimal cost impact anticipated.

Enforcing Agencies

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HB3388
Relating to group property and casualty insurance policies.
Critical Urgency
Unanimous Passage
House Vote144 - 0
YEA
100% in favor144 voting
Senate Vote31 - 0
YEA
100% in favor31 voting
Cost Impact
Low
Effective
2025-06-20
Enforcing Agencies
Surplus Lines Stamping Office of...Texas Department of Insurance
Primary Author: Rep. Dennis Paul
89th Texas Legislature
jdkey.com
01

Compliance Analysis

Key implementation requirements and action items for compliance with this legislation

Implementation Timeline

  • Effective Date: June 20, 2025 (Immediate effect due to two-thirds vote).
  • Compliance Deadline: Immediate. All policies delivered, issued for delivery, or renewed on or after June 20, 2025, must comply.
  • Agency Rulemaking: While the law is effective now, the Texas Department of Insurance (TDI) is expected to promulgate rules regarding rate reasonableness and specific form filings for Personal Lines groups. Expect regulatory bulletins within 60-90 days.

Immediate Action Plan

  • 1. Halt Issuance: Stop issuing or renewing any Personal Lines Group policy with a shared aggregate limit immediately.
  • 2. Update Fulfillment: Direct IT and Operations vendors to bundle the full policy wording with the certificate for all outgoing member packets effective immediately.
  • 3. Audit Groups: Review all Personal Lines groups to ensure they meet the 10-member minimum and possess a documented preexisting relationship.
  • 4. Revise Surplus Workflows: Instruct surplus lines staff to switch diligent effort searches to an annual basis per master policy, rather than per certificate.

Operational Changes Required

Contracts

  • Personal Lines Master Policies: You must immediately amend these to remove any shared aggregate limits; coverage limits must apply individually to each member.
  • Renewal Clauses: Insert provisions in Personal Lines master policies stating coverage cannot be renewed if the group size falls below 10 certificate holders.
  • Enroller Agreements: If utilizing unlicensed personnel to enroll members in Personal Lines groups, amend third-party administrator (TPA) or association contracts to explicitly state that no commission or compensation is paid to these individuals for enrollment activities.

Hiring/Training

  • Sales Staff (Commercial): Train staff to provide the mandatory "Shared Limit Disclosure" *during the application process*, not at binding.
  • Surplus Lines Agents: Retrain filing staff to stop submitting individual certificates to the Stamping Office; only the Master Policy requires filing.

Reporting & Record-Keeping

  • Fulfillment Workflows (Critical): Configure systems to deliver both the Certificate of Insurance AND a copy of the Policy to every member within 30 days of issuance/renewal. "Access to a portal" may not satisfy the statutory requirement to "deliver" without further TDI guidance.
  • Commercial Disclosures: Implement a mandatory form acknowledging the existence and amount of any shared aggregate limit; retain this in the underwriting file.
  • Group Validation: Maintain a permanent compliance file documenting the "preexisting relationship" of any Personal Lines group to prove it was not formed solely to purchase insurance.

Fees & Costs

  • Fulfillment Costs: Budget for increased digital transmission or postage costs due to the requirement to deliver full policy documents to every member.
  • Filing Fees: Surplus Lines filing fees will now apply at the Master Policy level, eliminating per-certificate filing fees.

Strategic Ambiguities & Considerations

  • "Reasonable to Premiums": Section 2172.003(a)(2) requires benefits to be "reasonable to the premiums charged." TDI has not defined the loss ratio threshold for this. Programs with high margins (low claims) are at high risk of regulatory audit.
  • Digital Delivery vs. Portal Access: The statute requires insurers to "deliver" the policy. It is unclear if posting to a secure portal constitutes compliant delivery. Until TDI issues a rule, active transmission (email attachment or mail) is the only legally safe method.
  • "Incidental" Coverage: The law allows liability coverage "incidental" to property risks. The boundary of "incidental" is undefined and will likely be settled by enforcement actions.

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.

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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.

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Legislative Timeline

This bill's path through the Texas Legislature

Filed
Feb 26, 2025
Passed House
May 12, 2025
Passed Senate
May 28, 2025
Signed
Jun 20, 2025
Effective
Jun 20, 2025
TopicsInsuranceInsurance--property & CasualtyInsurance, Commissioner ofInsurance--insurers & Agents
03

House Authors

Rep. Dennis PaulRepublican · Primary Author
Joint Authors

Senate Sponsor

Sen. Mayes MiddletonRepublican · Primary Sponsor

Bill Text(with markup)

View bill text in multiple formats on Texas Legislature website

Fiscal NoteView Original

Related Legislation

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More from Rep. Dennis Paul

View all bills by Rep. Dennis Paul

Related by Topic

View more Insurance legislation
Quick Reference

Frequently Asked Questions

Common questions about HB3388

Q

What does Texas HB3388 do?

HB3388 immediately bifurcates group property and casualty insurance into two distinct regulatory frameworks: Commercial Group (Chapter 2171) and Personal Lines Group (Chapter 2172). The legislation imposes a critical operational mandate requiring the delivery of the full policy wording—not just a certificate—to every individual member within 30 days, and strictly prohibits shared aggregate limits for Personal Lines groups.

Q

Who authored HB3388?

HB3388 was authored by Texas Representative Dennis Paul during the Regular Session.

Q

When was HB3388 signed into law?

HB3388 was signed into law by Governor Greg Abbott on June 20, 2025.

Q

Which agencies enforce HB3388?

HB3388 is enforced by Surplus Lines Stamping Office of Texas and Texas Department of Insurance.

Q

How significant are the changes in HB3388?

The regulatory priority for HB3388 is rated as "critical". Businesses and organizations should review the legislation to understand potential impacts.

Q

What is the cost impact of HB3388?

The cost impact of HB3388 is estimated as "low". This may vary based on industry and implementation requirements.

Q

What topics does HB3388 address?

HB3388 addresses topics including insurance, insurance--property & casualty, insurance, commissioner of and insurance--insurers & agents.

Q

What are the key dates for HB3388?

Key dates for HB3388: Effective date is 2025-06-20. Consult with legal counsel regarding applicability.

Q

Which Texas businesses are affected by HB3388?

HB3388 primarily affects insurance companies and financial institutions, property owners and real estate professionals. 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