Bill Text: TX HB1007 | 2013-2014 | 83rd Legislature | Introduced

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Bill Title: Relating to prohibiting the use of credit scoring in certain lines of personal insurance.

Sponsorship: Partisan Bill (Democrat 1)

Status: (Introduced - Dead) 2013-02-18 - Referred to Insurance [HB1007 Detail]

Download: Texas-2013-HB1007-Introduced.html

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83R2325 TJS-D
By: Johnson H.B. No. 1007

A BILL TO BE ENTITLED
AN ACT
relating to prohibiting the use of credit scoring in certain lines
of personal insurance.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Sections 559.001(2), (4), and (7), Insurance
Code, are amended to read as follows:
(2) "Agent" means a person licensed or required to be
licensed as a [general] property and casualty insurance agent [or a
personal lines property and casualty agent] under Subchapter B, C,
D, or E, Chapter 4051.
(4) "Consumer" means an individual whose credit
information has been reported to or is in the possession of a
consumer reporting agency or an insurer [is used or whose credit
score is computed in the underwriting or rating of a personal
insurance policy]. The term includes an applicant for insurance
coverage.
(7) "Credit report" means any written, oral, or other
communication of information by a consumer reporting agency that[:
[(A)] bears on a consumer's creditworthiness,
credit standing, or credit capacity[; and
[(B) is used or expected to be used or collected
in whole or in part to serve as a factor to determine personal
insurance premiums, eligibility for coverage, or tier placement].
SECTION 2. Section 559.002, Insurance Code, is amended to
read as follows:
Sec. 559.002. APPLICABILITY OF CHAPTER. This chapter
applies to each [an] insurer that writes personal insurance
coverage [and uses credit information or credit reports for the
underwriting or rating of that coverage].
SECTION 3. Section 559.052, Insurance Code, is amended to
read as follows:
Sec. 559.052. [PROHIBITED] USE OF CREDIT INFORMATION
PROHIBITED. (a) An insurer may not:
(1) use an underwriting guideline [a credit score]
that is based wholly or partly on the credit information, credit
report, or credit score of an applicant for insurance coverage or
any person other than the applicant who would be insured under a
policy of personal insurance [computed using factors that
constitute unfair discrimination];
(2) refuse to underwrite or [deny,] cancel[,] or
nonrenew a policy of personal insurance based wholly or partly
[solely] on the [basis of] credit information, credit report, or
credit score of an applicant for insurance coverage or any person
other than the applicant who would be insured under the policy
[without considering any other applicable underwriting factor
independent of credit information]; [or]
(3) take an action that results in an adverse effect
against a consumer because the consumer does not have a credit card
account;
(4) charge an applicant for insurance coverage a
higher premium than otherwise would be charged based wholly or
partly on the credit information, credit report, or credit score of
the applicant or any person other than the applicant who would be
insured under a policy of personal insurance;
(5) rate a risk based wholly or partly on the credit
information, credit report, or credit score of an applicant for
insurance coverage or any person other than the applicant who would
be insured under a policy of personal insurance, including:
(A) providing or removing a discount;
(B) assigning the applicant for insurance
coverage to a rating tier; or
(C) placing an applicant for insurance coverage
with an affiliated company; or
(6) require a particular payment plan based wholly or
partly on the credit information, credit report, or credit score of
the applicant for insurance coverage or any person other than the
applicant who would be insured under a policy of personal insurance
[without considering any other applicable factor independent of
credit information].
(b) An insurer may not consider an absence of credit
information or an inability to determine credit information for an
applicant for insurance coverage or for an insured as a factor in
underwriting or rating an insurance policy [unless the insurer:
[(1) has statistical, actuarial, or reasonable
underwriting information that:
[(A) is reasonably related to actual or
anticipated loss experience; and
[(B) shows that the absence of credit information
could result in actual or anticipated loss differences;
[(2) treats the consumer as if the applicant for
insurance coverage or insured had neutral credit information, as
defined by the insurer; or
[(3) excludes the use of credit information as a
factor in underwriting and uses only other underwriting criteria].
SECTION 4. Section 559.055, Insurance Code, is amended by
adding Subsection (c) to read as follows:
(c) This section expires September 1, 2014.
SECTION 5. The following laws are repealed:
(1) Section 559.004(b), Insurance Code;
(2) Sections 559.003, 559.051, 559.053, 559.054, and
559.056, Insurance Code; and
(3) Subchapters C and D, Chapter 559, Insurance Code.
SECTION 6. (a) The changes in law made by this Act apply
only to a personal insurance policy:
(1) that is delivered, issued for delivery, or renewed
on or after January 1, 2014;
(2) the application for which is submitted on or after
January 1, 2014; or
(3) that is subject to determination of refusal to
underwrite, cancellation, or nonrenewal on or after January 1,
2014.
(b) A personal insurance policy delivered, issued for
delivery, or renewed before January 1, 2014, or the application for
which is submitted before January 1, 2014, is governed by the law as
it existed immediately before January 1, 2014, and that law is
continued in effect for that purpose.
SECTION 7. This Act takes effect September 1, 2013.