81R14005 PMO-D
By: Harper-Brown H.B. No. 2734
A BILL TO BE ENTITLED
AN ACT
relating to disclosure of credit scoring by insurers.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 559.051, Insurance Code, is amended to
read as follows:
Sec. 559.051. PERMISSIBLE USE OF CREDIT SCORING;
ADVERTISEMENT. (a) An insurer may use credit scoring, except for
factors that constitute unfair discrimination, to develop rates,
rating classifications, or underwriting criteria regarding lines
of insurance subject to this chapter.
(b) A person may not use an advertisement for or display on
an Internet website an insurance product from a line of insurance
that uses credit scoring under Subsection (a) unless the
advertisement or website includes in a prominent place the
following language or similar language: "In connection with this
insurance product, we may review your credit report or obtain or use
a credit score based on the information contained in that credit
report. We may use a third party in connection with the development
of your credit score."
SECTION 2. Sections 559.053(a), (b), and (c), Insurance
Code, are amended to read as follows:
(a) An insurer that uses credit scoring in the underwriting
or rating of insurance subject to this chapter shall disclose to
each applicant for insurance coverage that the applicant's credit
report may be used in the underwriting or rating of the applicant's
policy. The disclosure must be provided at the time of application
by the insurer or agent and may be given [orally,] in writing[,] or
electronically.
(b) If a policy is issued to the applicant for insurance
coverage, an insurer or agent shall [is not required to] make the
disclosure required under Subsection (a) on any subsequent renewal
of the coverage.
(c) An insurer or its agent shall disclose to its customers,
in writing or electronically, on a form adopted by the
commissioner, whether credit information will be obtained on an
applicant for insurance coverage or insured or on any other member
or members of the applicant's or insured's household and used as
part of the insurance credit scoring process.
SECTION 3. This Act applies only to an insurance policy or
contract or evidence of coverage that is delivered, issued for
delivery, or renewed on or after January 1, 2010. An insurance
policy or contract or evidence of coverage delivered, issued for
delivery, or renewed before January 1, 2010, is governed by the law
as it existed immediately before the effective date of this Act, and
that law is continued in effect for that purpose.
SECTION 4. This Act takes effect September 1, 2009.