Relating to prohibition of the use of credit scoring in underwriting and rating certain personal lines of insurance coverage.
Impact
If enacted, SB110 will amend several sections of the Texas Insurance Code, establishing a more consumer-friendly regulatory framework. By disallowing the use of credit-related information in the underwriting process, the bill aims to mitigate the risks associated with penalizing individuals who may have poor credit ratings but are otherwise financially responsible. The implementation of this bill could reshape the landscape of personal insurance, opening access to coverage for a broader range of consumers, possibly leading to lower rates for those previously penalized due to their credit history.
Summary
Senate Bill 110 proposes significant changes to the Insurance Code of Texas, specifically focusing on the prohibition of credit scoring in the underwriting and rating of personal insurance policies. This legislation seeks to prevent insurers from using credit reports or credit scores when making decisions related to underwriting or setting rates for personal lines of insurance coverage. The intent is to ensure that consumers are not unfairly discriminated against based on their credit history when purchasing insurance products.
Contention
There are notable points of contention surrounding SB110. Proponents argue that using credit scores in underwriting leads to unjust disadvantage, particularly affecting low-income individuals and those who have experienced financial setbacks. They assert that this practice does not reflect an individual's current risk or reliability as a policyholder. Conversely, opponents of the bill fear that banning credit scoring could result in insurers being forced to raise rates overall, as they will lack an important tool for assessing risk. This could consequently lead to higher premiums for all policyholders, potentially undermining the intended benefits of the legislation.
Relating to consideration by insurers of certain prohibited criteria for ratemaking and coverage decisions and the use of disparate impact analysis regarding certain insurance practices.
Relating to the reporting of lost or stolen firearms and to proof of loss for personal property insurance coverage for those firearms; creating a criminal offense.
Relating to professional liability insurance coverage for and prohibitions on providing to certain children procedures and treatments for gender transitioning, gender reassignment, or gender dysphoria; creating a criminal offense.
Relating to professional liability insurance coverage for and prohibitions on the provision to certain children of procedures and treatments for gender transitioning, gender reassignment, or gender dysphoria.
Relating to professional liability insurance coverage for and prohibitions on the provision to certain children of procedures and treatments for gender transitioning, gender reassignment, or gender dysphoria and to the abuse of a child.