Bill Text: TX HB194 | 2011-2012 | 82nd Legislature | Introduced


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

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Introduced - Dead) 2011-03-01 - Left pending in committee [HB194 Detail]

Download: Texas-2011-HB194-Introduced.html
  82R363 KCR-F
 
  By: Walle H.B. No. 194
 
 
 
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, 2012.
         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, 2012;
               (2)  the application for which is submitted on or after
  January 1, 2012; or
               (3)  that is subject to determination of denial,
  cancellation, or nonrenewal on or after January 1, 2012.
         (b)  A personal insurance policy delivered, issued for
  delivery, or renewed before January 1, 2012, or the application for
  which is submitted before January 1, 2012, is governed by the law as
  it existed immediately before January 1, 2012, and that law is
  continued in effect for that purpose.
         SECTION 7.  This Act takes effect September 1, 2011.
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