The Texas Senate has passed Senate Bill 1643, which would shift the state’s insurance rate-setting system from file-and-use to a prior approval model for both personal and commercial property and auto insurance rates.
The legislation requires insurers to obtain approval from the insurance commissioner for any rate adjustment exceeding 10%, whether an increase or decrease.
Under the bill, if the commissioner does not act within 30 days, the proposed rate becomes effective by default—unless the filing proposes an increase of 10% or more, in which case explicit approval is necessary.
The current file-and-use framework allows insurers to implement rate changes with minimal delay, enabling quicker responses to market shifts but exposing policyholders to potentially elevated premiums until regulators intervene.
Supporters of the bill argue it balances insurer flexibility with added consumer protections. By introducing a regulatory threshold, the legislation aims to prevent sudden or excessive pricing shifts while preserving insurers’ ability to manage risk.
The insurance industry has expressed strong opposition. The Insurance Council of Texas stated that the existing system ensures rates remain actuarially sound and promotes market competition.
The American Property Casualty Insurance Association (APCIA) warned the proposed change could lead to unintended consequences.
We have seen in other states what happens when state regulators try to suppress insurance rates with the hand of big government. It breaks the link between insurance rates and the cost of loss that insurers are asked to cover
Scot Kibbe, APCIA vice president of state government relations
Kibbe called on lawmakers to pursue alternatives such as tort reform and stricter building codes to address rising property insurance rates. “This approach risks long-term instability in the insurance market.”
If enacted, SB 1643 would take effect on September 1, 2025, with implementation beginning in the 2026 policy year.
