| 1 | 1 | | 81R7121 TJS-D |
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| 2 | 2 | | By: Davis, Wendy S.B. No. 1157 |
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| 3 | 3 | | |
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| 4 | 4 | | |
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| 5 | 5 | | A BILL TO BE ENTITLED |
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| 6 | 6 | | AN ACT |
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| 7 | 7 | | relating to a study concerning the collection and use of certain |
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| 8 | 8 | | information by certain insurers. |
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| 9 | 9 | | BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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| 10 | 10 | | SECTION 1. DEFINITION. In this Act, "department" means the |
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| 11 | 11 | | Texas Department of Insurance. |
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| 12 | 12 | | SECTION 2. DEPARTMENT STUDY CONCERNING DATA MINING AND |
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| 13 | 13 | | PATTERN RECOGNITION. The department shall conduct a study of: |
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| 14 | 14 | | (1) technologies such as statistical techniques, |
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| 15 | 15 | | devices, or models that may be used by or on behalf of an insurer |
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| 16 | 16 | | that writes personal automobile or residential property insurance |
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| 17 | 17 | | to establish new classifications or to change methods of |
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| 18 | 18 | | classification for rating, tiering, or underwriting; and |
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| 19 | 19 | | (2) the manner in which the insurer may use the |
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| 20 | 20 | | relationships derived from the technologies described by |
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| 21 | 21 | | Subdivision (1) in: |
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| 22 | 22 | | (A) predicting differences in expected losses of |
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| 23 | 23 | | insureds or applicants for coverage; |
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| 24 | 24 | | (B) underwriting and creating and defining risk |
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| 25 | 25 | | classifications or changing a method of classification; |
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| 26 | 26 | | (C) setting or determining rates and premiums; or |
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| 27 | 27 | | (D) using classifications or a change in a method |
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| 28 | 28 | | of classification to deny coverage, limit coverage, or refuse to |
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| 29 | 29 | | renew or cancel coverage for individual insureds. |
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| 30 | 30 | | SECTION 3. REPORT TO LEGISLATURE. The department shall |
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| 31 | 31 | | include a report of the results of the study conducted under this |
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| 32 | 32 | | Act in the biennial report to the 82nd Legislature made under |
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| 33 | 33 | | Section 32.022, Insurance Code. The report must describe the impact |
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| 34 | 34 | | that the use of the relationships derived from technologies |
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| 35 | 35 | | described by Section 2 of this Act has on insurance, insureds, and |
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| 36 | 36 | | applicants for insurance in this state, and may include |
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| 37 | 37 | | recommendations for proposed legislation appropriate to regulate |
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| 38 | 38 | | or mitigate the use of those technologies. |
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| 39 | 39 | | SECTION 4. EFFECTIVE DATE. This Act takes effect |
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| 40 | 40 | | immediately if it receives a vote of two-thirds of all the members |
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| 41 | 41 | | elected to each house, as provided by Section 39, Article III, Texas |
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| 42 | 42 | | Constitution. If this Act does not receive the vote necessary for |
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| 43 | 43 | | immediate effect, this Act takes effect September 1, 2009. |
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