Pennsylvania House Bill HB657

Pennsylvania 2025-2026 Regular Session

• Introduced: 2/20/25
• Refer: 2/20/25

Caption

Providing for prohibited activities related to use of credit history of insured.

Impact

If enacted, HB 657 would significantly impact the insurance market in Pennsylvania by barring insurers from denying coverage or charging higher premiums based solely on credit history. This amendment aims to protect consumers, particularly those who may be financially vulnerable or unable to maintain a favorable credit score due to factors beyond their control. By restricting the use of credit histories in the insurance underwriting process, the bill seeks to ensure that insurance access and affordability is improved for a broader range of individuals.

Summary

House Bill 657 aims to amend Title 40 of the Pennsylvania Consolidated Statutes by introducing provisions that prohibit insurance companies and producers from using an individual's credit history as a factor in determining insurance premiums or eligibility. This legislation seeks to eliminate the practice of allowing credit scores to influence personal and life insurance rates, ensuring that consumers are not penalized for having poor credit histories. The intent is to promote fairer treatment of insured individuals, reducing the financial burden on those with lower credit standings, which may disproportionately affect certain demographic groups.

Sentiment

The general sentiment around HB 657 appears to be positive among consumer advocacy groups. These groups argue that the bill addresses inequities within the insurance market and promotes a more equitable system where individuals are evaluated based on more relevant factors related to their risk rather than credit scores. However, there may be some contention from insurance industry stakeholders who argue that credit history can be an effective predictor of risk and may express concerns about potential market impacts or the ability to appropriately price insurance products without considering credit factors.

Contention

One of the notable points of contention regarding HB 657 is the balance between consumer protection and the operational realities of insurance underwriting. Supporters contend that prohibiting the use of credit histories protects vulnerable populations, while opponents may argue that such a prohibition could lead to higher overall premiums or limited availability of insurance. The bill raises questions about how risk is assessed in the insurance industry and whether it strikes the right balance between consumer rights and industry practices.