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