Texas Supreme Court Dismisses Stonewater Roofing’s Claims Against Insurance Regulations (Texas Supreme Court)

Texas Supreme Court Dismisses Stonewater Roofing’s Claims Against Insurance Regulations

Tuesday, June 11th, 2024 Insurance Industry Legislation & Regulation Litigation Risk Management

The Texas Supreme Court ruled against Stonewater Roofing, a contractor challenging state regulations that require public insurance adjusters to be licensed. The case centered on whether these regulations infringed on free speech and due process rights. Stonewater Roofing argued that the licensing and dual-capacity prohibitions were unconstitutional under the First and Fourteenth Amendments.

The court upheld the Texas Department of Insurance’s (TDI) stance that these regulations govern professional conduct, not speech. Justice John P. Devine, writing for the majority, clarified that the statutes in question focus on the roles individuals play in nonexpressive commercial transactions and do not restrict protected speech. The court also found that the statutes were clear enough to dismiss both facial and as-applied vagueness challenges.

The ruling emphasized that contractors cannot act as both adjuster and contractor for the same property, preventing conflicts of interest. The decision reaffirms the state’s authority to regulate the insurance industry to protect consumers from potential exploitation, particularly in the aftermath of catastrophic events.

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External References & Further Reading

Mid-America Catastrophe ServicesChurchill Claims ServicesGRIP(Globe Roof Inspection Program)

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