JD Key Consulting Logo
Signed Into Law
Signed June 20, 2025Effective 2025-09-01
SB213

Regular Session

Relating to prohibiting insurers from requiring the tying of residential property and personal automobile insurance policies.

Government Affairs & Regulatory Compliance Analysis

SB213: Government Affairs Overview

SB213 fundamentally alters personal lines underwriting by classifying the "tying" of residential property and personal automobile insurance as an unfair method of competition. Effective September 1, 2025, insurers are prohibited from conditioning the issuance, delivery, or renewal of one policy on the purchase of the other. While bundling discounts remain legal, mandatory bundling eligibility is illegal; this applies to all authorized insurers in Texas (including County Mutuals and Lloyd’s Plans), with specific exemptions for TWIA, NFIP, and umbrella policies.

Sen. Royce West·Senate Bill·Regular Session

Critical
Low Cost
Effective:2025-09-01
Business Impact

Who SB213 Affects

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

Regulatory Priority: critical

Significant regulatory changes (effective 2025-09-01). 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

  • 1Vendor/TPA Agreements: If you utilize third-party underwriting software or administrators, issue a directive immediately requiring them to update their logic to permit standalone policy issuance.
  • 2Underwriting Logic: Underwriters must be trained to evaluate risks independently. "Lack of supporting business" is no longer a valid underwriting criterion for rejection or non-renewal.

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.

SB213
Critical
Relating to prohibiting insurers from requiring the tying of residential property and personal automobile insurance policies.
Critical Compliance Urgency
Requires immediate attention
Cost Impact
Low
Effective
2025-09-01
Enforcing Agencies
Office of the Attorney GeneralTexas Department of Insurance
Primary Author: Sen. Royce West
89th Texas Legislature
jdkey.com
01

Compliance Analysis

Key implementation requirements and action items for compliance with this legislation

Implementation Timeline

  • Effective Date: September 1, 2025
  • Compliance Deadline: July 1, 2025 (Operational Recommendation). Because the law applies to policies *renewed* on or after September 1, renewal offers generated and mailed 30-60 days prior must already be scrubbed of cross-line contingency logic.
  • Agency Rulemaking: While no specific rulemaking deadline is set, the Texas Department of Insurance (TDI) is expected to issue a Commissioner’s Bulletin regarding enforcement standards. Expect strict scrutiny on rate filings to ensure "monoline" pricing is not used as a loophole to constructively refuse business.

Immediate Action Plan

  • IT Audit (Immediate): Test your agent portals and consumer-facing quote engines. If the system generates an error message for a monoline quote, initiate a code fix immediately.
  • Scrub Renewal Lists: Identify all policies set for non-renewal in September 2025 where the sole reason is "unbundled status." Rescind these non-renewals immediately.
  • Update Underwriting Manuals: Formally strike "supporting business" requirements from your filed underwriting guidelines.
  • Distribute Agency Bulletin: Send a formal notice to all appointed agents clarifying that while bundling discounts persist, mandatory tying requirements are ending.

Operational Changes Required

Contracts

  • Agency Agreements: Review Master Service Agreements (MSAs). Clauses requiring agents to maintain specific "bundle ratios" to retain appointment must be reviewed to ensure they do not pressure agents into violating the statutory ban on refusing monoline business.
  • Vendor/TPA Agreements: If you utilize third-party underwriting software or administrators, issue a directive immediately requiring them to update their logic to permit standalone policy issuance.

Hiring/Training

  • Sales Scripts: Sales staff and agents must be retrained. They may aggressively market the *price advantage* of bundling, but they are legally barred from stating or implying that *availability* of coverage depends on the companion policy.
  • Underwriting Logic: Underwriters must be trained to evaluate risks independently. "Lack of supporting business" is no longer a valid underwriting criterion for rejection or non-renewal.

Reporting & Record-Keeping

  • Declination Codes: Audit your policy administration system immediately. You must ensure that no application is rejected with a system code equivalent to "Failure to Bundle" or "No Companion Policy."
  • Audit Trails: If a standalone policy is rejected, the file must explicitly document the *independent* underwriting reason for rejection (e.g., claims history, property condition) to withstand a TDI market conduct exam.

Fees & Costs

  • IT Remediation: Budget for immediate software updates. Online quoting engines and agent portals often have "hard stops" preventing a quote without a companion policy number; these must be recoded.
  • Rate Filings: Ensure you have active, filed rates for standalone (monoline) products if you previously only wrote bundled business.

Strategic Ambiguities & Considerations

  • "Constructive" Tying via Pricing: The law prohibits conditioning *issuance* on the other policy, but allows risk-based pricing. A major gray area is whether TDI will view prohibitively expensive monoline rates as a "constructive refusal" to write. If your standalone policy is priced 300% higher than a bundled policy without actuarial justification, you risk enforcement under general unfair practice statutes.
  • Affiliated Insurers: The prohibition extends to "affiliated insurers." Holding companies with complex structures must ensure that cross-selling strategies between different subsidiaries do not inadvertently trigger this violation.

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 Senate
Mar 26, 2025
Passed House
May 21, 2025
Signed
Jun 20, 2025
Effective
Sep 1, 2025
TopicsInsuranceInsurance--fire, Allied Lines & HomeInsurance--generalInsurance--property & CasualtyVehicles & TrafficVehicles & Traffic--insurance/financial ResponsibilityInsurance--motor Vehicles
03

Senate Authors

Sen. Royce WestDemocrat · Primary Author
Coauthors (12)

House Sponsor

Rep. Jay DeanRepublican · 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 Sen. Royce West

View all bills by Sen. Royce West

Related by Topic

View more Insurance legislation
Quick Reference

Frequently Asked Questions

Common questions about SB213

Q

What does Texas SB213 do?

SB213 fundamentally alters personal lines underwriting by classifying the "tying" of residential property and personal automobile insurance as an unfair method of competition. Effective September 1, 2025, insurers are prohibited from conditioning the issuance, delivery, or renewal of one policy on the purchase of the other. While bundling discounts remain legal, mandatory bundling eligibility is illegal; this applies to all authorized insurers in Texas (including County Mutuals and Lloyd’s Plans), with specific exemptions for TWIA, NFIP, and umbrella policies.

Q

Who authored SB213?

SB213 was authored by Texas Senator Royce West during the Regular Session.

Q

When was SB213 signed into law?

SB213 was signed into law by Governor Greg Abbott on June 20, 2025.

Q

Which agencies enforce SB213?

SB213 is enforced by Office of the Attorney General and Texas Department of Insurance.

Q

How significant are the changes in SB213?

The regulatory priority for SB213 is rated as "critical". Businesses and organizations should review the legislation to understand potential impacts.

Q

What is the cost impact of SB213?

The cost impact of SB213 is estimated as "low". This may vary based on industry and implementation requirements.

Q

What topics does SB213 address?

SB213 addresses topics including insurance, insurance--fire, allied lines & home, insurance--general, insurance--property & casualty and vehicles & traffic.

Q

What are the key dates for SB213?

Key dates for SB213: Effective date is 2025-09-01. Consult with legal counsel regarding applicability.

Q

What are the penalties under SB213?

SB213 establishes the following penalties: Civil/Administrative penalty of Injunctions, civil penalties, and restitution under Chapter 541 (Unfair Competition/Deceptive Practices) for Conditioning the issuance, delivery, or renewal of residential property insurance on the purchase of personal auto insurance (or vice versa) from the same or affiliated insurer.; Legal Limitation penalty of N/A for Private rights of action (lawsuits by individual policyholders) are explicitly prohibited for violations of this specific section; enforcement is reserved for the Attorney General.. Consult with legal counsel for specific applicability to your situation.

Q

Which Texas businesses are affected by SB213?

SB213 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