Relating to prohibition of the use of credit scoring in underwriting and rating certain personal lines of insurance coverage.
Impact
If enacted, SB739 would substantially amend the Insurance Code, particularly sections concerning the practices of insurers in Texas. By disallowing credit scoring in the underwriting process, the bill aims to reshape the criteria insurers use to determine risk. This change could lead to more inclusivity within the insurance market, particularly benefiting individuals from lower-income backgrounds or those who have previously faced financial hardships, ensuring that their insurance costs are not disproportionately high due to poor credit scores. Additionally, it would eliminate previous statutes allowing for rate variations based solely on credit reports.
Summary
SB739 proposes to prohibit the use of credit scoring in the underwriting and rating of certain personal lines of insurance in Texas. Specifically, the bill would prevent insurers from using an individual's credit report or credit score to refuse underwriting, cancel, refuse renewal of a policy, or affect the cost of insurance. This legislation is aimed at creating a fairer insurance market by ensuring that personal credit history does not influence essential insurance services, which are crucial for residents' economic stability and wellbeing. The bill emphasizes a more equitable model that protects consumers from potential discriminatory practices based on financial history.
Sentiment
The sentiment around SB739 appears to lean towards favoring consumer rights and protection. Advocates argue that the bill could reduce instances of discrimination faced by those with poor credit backgrounds, promoting fairness in the insurance industry. However, there could also be concerns raised by some stakeholders within the insurance sector regarding potential implications for risk assessment and pricing models. The discourse suggests a clear recognition of the need for balance between adequate risk evaluation for insurers and the financial accessibility of insurance for consumers.
Contention
Some points of contention regarding SB739 include the potential impact on insurers' ability to accurately assess risk without the use of credit information. Opponents may argue that excluding credit scoring could lead to higher premiums for consumers overall, as insurers would have fewer metrics to gauge reliability of applicants. Additionally, the bill seeks to repeal various existing regulations regarding credit scoring, which could create uncertainty during the transition phase as insurers adapt to the new statutory environment. The debate underscores the tension between protecting consumers and maintaining a sustainable insurance market.
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.