Texas Disclosure 101: A survival guide for P&C agents and clients

Earlier this year, a new law went into effect in Texas, requiring insurers to provide a reason for declining or canceling an auto or homeowners policy.

HB 2067 applies to decisions made by insurance companies after January 1, 2026, and affects all property and casualty insurers, including farm mutual insurance companies.

According to Carol Sherron, senior vice president and southwest zone client advisory leader at Marsh McLennan Agency’s Private Client Services division, this law marks a significant step toward greater transparency in the insurance marketplace.

“Making it standard practice for insurers to share this information benefits consumers by giving them clear insight into the factors influencing coverage decisions,” Sherron explained.

What HB 2067 means for consumers

The transparency of HB 2067 allows consumers to take targeted actions that address their unique concerns and improve their risk profiles. This can, in turn, expand their options for insurance coverage.

“Most A-rated carriers that we work with at Marsh are already sharing rationale for their decisions," Sherron said. "However, this new ruling requiring all carriers to do so is a step in the right direction for standardized consumer transparency.”

Of course, there is a downside in the form of an administrative burden placed on carriers that are required to meet these reporting requirements, as well as on the Texas Department of Insurance, which must collect, review, and publish the information.

Ways to communicate this law to clients

For insurance agents, HB 2067 underscores the importance of proactive communication with clients regarding underwriting concerns and risk management.

“Normalizing these discussions and providing education focused on improving insurability empowers clients to make educated decisions and take meaningful steps to enhance their risk profiles,” Sherron explained.

She encourages agents to engage in open and honest dialogue with clients affected by cancellation, non-renewal, or declination of coverage.

“Make it clear that carriers are legally required to provide reasons for adverse actions, and how this helps both parties work together to address concerns and identify the best strategy and solution moving forward,” Sherron said.

How to interpret carrier responses

When reviewing carrier responses from insurance companies, both agents and clients should carefully examine the reasons provided and ask clarifying questions if there is any confusion or uncertainty.

“Agents should be prepared to discuss carrier expectations and underwriting guidelines to provide context and help clients better understand their own risk profiles. It’s also their responsibility to guide clients on steps they can take to improve their eligibility for coverage,” Sherron explained.

At the end of the day, maintaining proactive and ongoing dialogue between agents and clients about issues that could lead to declination, cancellation, or non-renewal of coverage is critical to avoiding surprises, experts say.

Factors such as outstanding carrier requirements for a home, increased auto activity, or a pattern of frequent claims can trigger adverse carrier actions if left unaddressed.

“An annual review of the insurance program is an excellent opportunity to assess potential issues and discuss changes that may reduce the likelihood of future carrier actions,” Sherron added.

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Anna Baluch is a finance reporter and writer with more than a decade of experience. Contact her at [email protected]