Bill Text: TX HB127 | 2017-2018 | 85th Legislature | Introduced

Texas House Bill 127 (Prior Session Legislation)

Introduced

Bill Title: Relating to the use of credit scoring in the underwriting and rating of certain insurance policies.

Spectrum: Partisan Bill (Republican 2-0)

Status: (Introduced - Dead) 2017-02-13 - Referred to Insurance [HB127 Detail]

Download: Texas-2017-HB127-Introduced.html

	85R1727 SCL-D

	By: White	H.B. No. 127



	A BILL TO BE ENTITLED
	AN ACT
	relating to the use of credit scoring in the underwriting and rating
	of certain insurance policies.
	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
	SECTION 1. Subchapter A, Chapter 559, Insurance Code, is
	amended by adding Section 559.0025 to read as follows:
	Sec. 559.0025. SUSPENSION OF USE OF CREDIT SCORING. (a) An
	insurer may not use credit scoring in the underwriting or rating of
	an insurance policy to which this chapter applies and that is
	delivered, issued for delivery, or renewed on or after January 1,
	2018.
	(b) This section expires January 1, 2020.
	SECTION 2. (a) In this section:
	(1) "Commissioner" means the commissioner of
	insurance.
	(2) "Committee" means the Committee on Insurer Use of
	Credit Scoring.
	(b) The commissioner shall establish the Committee on
	Insurer Use of Credit Scoring to develop and make recommendations
	on whether credit scoring should be used in the underwriting or
	rating of insurance and if so, how the use of credit scoring may be
	improved. The recommendations must also specifically address the
	question of whether the lack of a credit score should ever influence
	insurance rates.
	(c) The committee is composed of nine members appointed by
	the commissioner as follows:
	(1) at least one representative of the insurance
	industry;
	(2) at least one representative of the Office of
	Public Insurance Counsel;
	(3) at least one policyholder who is not affiliated
	with the insurance industry; and
	(4) other members who represent one of the categories
	listed in Subdivisions (1), (2), and (3) of this subsection.
	(d) The commissioner shall designate one member to serve as
	the presiding officer of the committee.
	(e) A committee member is not entitled to compensation for
	service on the committee but is entitled to reimbursement for
	actual and necessary expenses incurred in performing committee
	duties.
	(f) The committee shall meet at least quarterly on the call
	of the presiding officer. Committee meetings are subject to the
	open meetings law, Chapter 551, Government Code.
	(g) The Texas Department of Insurance shall provide
	administrative support for the committee. Funding for the
	administrative and operational expenses of the committee shall be
	provided from the department's existing budget.
	(h) The committee's development of recommendations under
	this section must be based on a study of the effects of the use of
	credit scoring in the underwriting and rating of insurance. The
	study must, at a minimum, address and include findings regarding:
	(1) the effect of credit scoring on:
	(A) the elderly;
	(B) young people; and
	(C) people with little or no credit history,
	including wealthy people;
	(2) the range of effects that credit scoring has on
	insurance rates; and
	(3) the rate of errors in computing credit scores.
	(i) The committee shall prepare a written report of the
	committee's findings and recommendations under this section. The
	committee shall deliver the report to the governor, the lieutenant
	governor, and all members of the legislature not later than
	December 1, 2018.
	(j) The committee is abolished and this section expires June
	1, 2019.
	SECTION 3. This Act takes effect September 1, 2017.