Commissioner’s Bulletin # B-0007-26: Use of price optimization

Commissioner’s Bulletin # B-0007-26, dated September 2, 2026, addressed to all insurance companies and their agents and representatives, regarding the use of price optimization. ‘Price optimization’ refers to an insurance company’s practice of varying premiums based on factors unrelated to their policyholders’ risk of loss or the company’s expense so that the company can charge the highest price that policyholders will tolerate before shopping for a new policy. The practice of price optimization includes considering ‘the elasticity of demand’ to predict policyholders’ behavior—for example, the likelihood a policyholder will renew or shop for a lower premium, or a policyholder’s willingness to accept a price increase. The bulletin states these provisions show a clear intent that insurance companies doing business in Texas must classify risks according to cost-based considerations of insurance losses and expenses, and that they must disclose those considerations fully in their rate filings. Failure to fully comply is a violation of Texas law, and appropriate enforcement action will be taken. TDI expects all insurance companies to follow these laws and to not engage in the practice of price optimization. The bulletin was one of five directives Gov. Greg Abbott issued to TDI on August 24, 2026 as part of his efforts to help make auto and home insurance more affordable.