Number of Insurers Based in Texas ‘Average’ Compared to Size of Market

The Texas insurance market is ranked the 12th largest in the world in terms of premium volume, but only an “average” number of insurance carriers call the state home, and many of the 400 insurance companies that are based in Texas are small- and medium-sized, according to state insurance regulators.

In addition, Texas is only “average” in terms of the number of large insurance companies that are based in the state, the Texas Department of Insurance said in its biennial report to the state Legislature. The report defines a large insurance carrier as one that writes $500 million or more in annual premium.

Other states, TDI said, “retain a greater number of domestic insurers in relation to the size of their insurance markets and serve as the home to a disproportionately higher number of large insurance companies.”

Texas Insurance Commissioner Eleanor Kitzman told a group of surplus lines insurance professionals last November that her “philosophy generally is to request as little legislation as possible and only when there is just absolutely no other way to accomplish what I think needs to be done.”

Nevertheless, TDI outlined a number of initiatives lawmakers may want to consider in order to make the state more attractive to insurers.

The recommendations include:

• Spread the costs of TDI’s examination overhead assessments to all insurers licensed in Texas;
• Strengthen the protection of the confidential regulatory information submitted by insurers;
• Amend regulatory approval thresholds in the Texas Holding Company Act based on the NAIC model act language;
• Grant discretion to the insurance, commissioner, with concurrence from the comptroller, to grant tax credits for temporary periods of time for insurers who locate their physical operations in Texas;
• Appoint a study group to review Texas premium tax rates; and
• Update and streamline the incorporation and licensing statutes for insurance companies.