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Legislative Updates:

OAG Proposes New SB 17 Rules; Property Insurer Reporting Requirements Remain

The Office of the Attorney General published a new rule proposal Oct. 9 implementing SB 17, which prohibits certain foreign entities from acquiring real property in Texas. The proposal follows an earlier version published in March that expired without being adopted.

Like the original proposal, the new rules would require property insurers, along with other “facilitating entities,” to report certain transactions that may violate SB 17. ICT previously submitted joint comments with APCIA, NAMIC and IIAT expressing concerns about including property insurers, which are not directly involved in real estate transactions and are not well-positioned to investigate potential violations.

One notable change is new language that appears to provide some protection for facilitating entities that conduct know-your-customer due diligence consistent with applicable regulatory guidelines or recognized industry standards and do not discover a violation. However, the proposal would still include property insurers among the entities subject to reporting requirements.

ICT anticipates submitting comments on the new proposal and is working with its committees to gather feedback.

The full proposed rules are available here, beginning on page 6.

TDI Updates:

Most homeowners insurance companies that filed rate changes with the Texas Department of Insurance (TDI) since July 1 proposed decreases, affecting about 700,000 Texas policyholders. Over the past 90 days, filed homeowners rate changes averaged a 4.3% decrease.

NCCI Files Proposed Revisions to Workers’ Compensation Premium Algorithms

NCCI has filed Item B-1453, Revisions to NCCI’s Basic Manual and NCCI’s Residual Market Manual Regarding the Premium Algorithms. The filing also includes revisions to NCCI’s Residual Market Manual in other states, but those changes do not apply to Texas.

NCCI proposes that the changes apply to new and renewal workers’ compensation policies issued on or after July 1, 2027.

TDI is accepting comments through Nov. 6. Members with feedback they would like ICT to consider submitting can email Angie Cervantes.

The filing notice is available here.

TWIA Updates:

The Texas Windstorm Insurance Association (TWIA) Board of Directors held a special meeting Oct. 8 to consider legislative recommendations for its Biennial Report to the 90th Texas Legislature and review its preliminary 2027 budget. Meeting materials can be found here.

The board advanced several recommendations from its Legislative and External Affairs Committee, with modifications to proposals involving FORTIFIED construction and depopulation.

The following recommendations were approved:

• Multidistrict litigation: Eliminate or make optional the statutory requirement that lawsuits involving denied TWIA claims be presided over by a judge appointed by the Multidistrict Litigation Panel.

• FORTIFIED construction: Explore the feasibility and potential public funding of FORTIFIED construction and other mitigation programs. The board removed language that would have allowed TWIA to use its Catastrophe Reserve Trust Fund for mitigation following discussion about the governor’s proposed $400 million statewide program.

• HB 3689 refinements: Provide additional time to implement state financing arrangements and statewide policy surcharges and allow alternative funding for smaller losses after the Catastrophe Reserve Trust Fund is exhausted.

• Depopulation: Consider incentives for insurers to assume TWIA policies, including per-policy bonuses subject to TDI approval, and legislation to encourage greater private market participation. The board also discussed a proposal modeled after Florida that would require policyholders to accept comparable private market coverage within 20% of TWIA’s premium. The recommendation was broadened without specifying a premium threshold following concerns about the potential impact on coastal policyholders.

The board also considered additional tort reforms modeled after Florida but ultimately tabled the recommendation after reviewing TWIA’s existing litigation protections.

2027 budget: TWIA projects gross operating expenses will decrease nearly 9% compared with 2026, while reinsurance costs are expected to decline to about $173 million, down from $210 million in 2026. Assuming no significant storm losses, the Catastrophe Reserve Trust Fund is projected to grow from about $59 million at the end of 2026 to $350.5 million by the end of 2027.

The board is expected to consider adoption of the final 2027 budget at its Nov. 10 meeting. Its legislative recommendations will be included in TWIA’s Biennial Report ahead of the 2027 legislative session.

ICT members can view a full recap of the meeting here.

ICT Updates:

Albert Betts to Speak at 2026 PIA Texas Exchange

ICT Executive Director Albert Betts, Jr. will be a featured speaker at the 2026 PIA Texas Exchange, taking place Oct. 13-15 at Margaritaville Lake Resort on Lake Conroe.

Betts will participate in the event’s keynote programming, sharing perspectives and industry insights with independent insurance professionals from across Texas. The PIA Texas Exchange brings together agency owners, producers, customer service representatives, emerging leaders and industry partners for education, networking, legislative updates and discussions on trends affecting the insurance marketplace.

ICT is pleased to participate in this year’s event and looks forward to connecting with insurance professionals from across the state.

Learn more and register for the 2026 PIA Texas Exchange.

ICT at SITA: Insurance Trends and Policy Issues Across the States

The Insurance Council of Texas is partnering with WorkCompCentral for a free live webinar on Oct. 27 examining the legislative and policy issues shaping the Texas workers’ compensation system ahead of the 90th Texas Legislature. 

ICT Executive Director Albert Betts, Jr. and Legal and Legislative Advocacy Counsel Jon Schnautz will join Amy Lee, president of Steadfast Policy Strategies, for the two-hour session. The panel will discuss how workers’ compensation is positioned within the Texas House and Senate committee structure, current legislative priorities and the political and policy forces that could influence the upcoming legislative session. 

The webinar will also explore how emerging priorities could affect employers, insurers, injured workers, medical providers and the broader workers’ compensation system, giving attendees practical insight as they prepare for the session ahead.

Texas claims and MCLE credit hours are pending approval. 

Register for the free webinar

ICT will host “STAT & GAAP Accounting and Reporting Update” on Oct. 26, featuring Catherine Stout, an Assurance Shareholder with extensive experience in insurance audits, internal controls and regulatory compliance.

The webinar will cover key statutory and GAAP accounting and reporting updates, including changes effective in 2026 and beyond, annual statement revisions and investment reporting considerations. Stout will also discuss common issues identified during annual financial statement audits, including risk transfer, reserves, reinsurance, captive arrangements and related-party contracts.

Stout conducts financial statement audits on STAT and GAAP bases, oversees attestation projects for reinsurance transactions and prepares reports for the NAIC and state regulators. Insurance accounting, financial reporting, compliance and audit professionals are encouraged to attend. The session will include audience questions and discussion.

 Industry News:

The Forces Shaping Texas’ Next Decade

Texas 2036

Texas 2036 says the next decade will be critical as Texas moves toward its bicentennial with a larger population, stronger economy and major education and workforce challenges. The state is projected to reach about 35.7 million people by 2036, but growth is slowing, becoming more concentrated in the Texas Triangle and uneven across rural and urban communities. Texas’ economy has grown significantly, but the state’s long-term success will depend on whether education, workforce training and career pathways can prepare more Texans to participate in that growth.

Key points

• Texas is still growing, but the pattern is changing: Texas added more than 391,000 residents from July 2024 to July 2025, reaching 31.7 million people, but migration is slowing and the state’s growth is becoming more concentrated. 
• The Texas Triangle will drive most future growth: The Dallas-Fort Worth, Austin, San Antonio and Houston regions are projected to account for 99% of the state’s net growth through 2036, creating different planning needs for fast-growing metro areas and slower-growing rural regions.
• Texas has gained major economic ground: The state’s economy grew from $742 billion in 2000 to $2.9 trillion in 2025, making Texas the nation’s second-largest state economy.
• Education progress is mixed: Reading scores have improved beyond pre-pandemic levels in every tested grade, but more than four in 10 eighth graders are still not reading at grade level, and seventh-grade math performance remains 12 percentage points below 2019 results.
• Workforce pathways are becoming more important: Texas 2036 points to growth in career-connected education, including a 532% increase in postsecondary credentials earned in high school since 2018, as a key opportunity for preparing students for college, credentials or careers.

Property Claims Are Fewer but Costlier as Labor Costs Keep Climbing

Risk & Insurance

U.S. property claim assignment volume fell to a five-year low in the second quarter of 2026, but the claims that are being filed are becoming more expensive. Verisk reported that severity is on pace to climb, driven by higher labor costs, reconstruction costs and catastrophe-related activity in certain markets. The trend shows that fewer claims do not necessarily mean lower overall pressure for insurers, policyholders or restoration providers when repair costs continue rising.

Key points

• Property claim volume is down: U.S. claim assignment volume fell to a five-year low in the second quarter of 2026, continuing a broader trend of fewer property claims.
• Claim severity is still rising: Even with fewer assignments, Verisk said claim severity is headed toward one of the highest levels in recent years.
• Labor costs remain a major driver: Higher labor expenses continue to increase the cost of property repairs, making individual claims more expensive to resolve.
• Reconstruction costs are still climbing: Verisk projects U.S. residential reconstruction costs will rise about 1.8% between July 2026 and January 2027, a slower pace than the sharp inflation seen from 2021 through 2024 but still an added cost pressure. 
• Regional catastrophe activity matters: In Canada, Ontario still accounted for 41% of national claim volume despite a decline, while Manitoba assignments rose 80.5%, including a more than 200% increase in water claims tied to catastrophe activity

$8.82M State Farm UMPD insurance class action settlement

Top Class Actions

State Farm agreed to an $8.82 million class action settlement involving allegations that it failed to properly pay diminished value claims under Washington underinsured motorist property damage coverage. The settlement applies to certain Washington policyholders who had State Farm UMPD coverage and received payment for vehicle damage after an accident. State Farm has not admitted wrongdoing, but eligible class members may file a claim for a cash payment from the settlement fund.

Key points

• The settlement focuses on diminished value: The lawsuit alleged State Farm failed to properly pay for diminished value, which refers to the loss in a vehicle’s market value after it has been damaged and repaired. 
• Washington policyholders are the affected group: The settlement involves State Farm Mutual Automobile Insurance Co. policyholders with underinsured motorist property damage coverage in Washington. 
• The settlement fund totals $8.82 million: State Farm agreed to pay $8.82 million to resolve the class action, though the company denies wrongdoing. 
• Eligible consumers may receive a cash payment: The settlement provides an opportunity for qualifying class members to submit a claim for payment, with amounts expected to be distributed from the settlement fund after fees, costs and other approved deductions. 
• The case reflects broader scrutiny of auto claim payments: The dispute centers on whether policyholders were fully compensated after vehicle damage, highlighting ongoing questions around claims handling, diminished value and what auto insurance policies are required to pay.

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