Texas Senate Bill SB535

Texas 2009 - 81st Regular

Caption

Relating to use of certain factors in underwriting and rating a personal automobile insurance policy.

Impact

If enacted, this bill would modify how personal automobile insurance is priced and underwritten by removing occupation and educational achievement as determining factors. This change is expected to create a more equitable environment in which insurance rates are determined solely by factors that directly affect the likelihood of a claim, such as driving record and vehicle safety. Starting from January 1, 2010, any policy issued or renewed will need to comply with these new guidelines, thus aligning all new policies with this fair assessment approach.

Summary

SB535 seeks to amend the Insurance Code in Texas by prohibiting insurers from using specific demographic factors, namely occupation and education levels, in the underwriting and rating of personal automobile insurance policies. By adding Section 1951.005, the legislation aims to promote fairness in the insurance market, ensuring that all individuals are assessed based on their driving history and other relevant factors rather than their job or educational background. This statute is intended to protect consumers from potential discrimination that could arise from such practices.

Contention

The discussion around SB535 may involve potential pushback from insurance companies, which might argue that these factors have a legitimate impact on risk assessment and are thus valid components in determining insurance premiums. Supporters of the bill, however, would likely contend that allowing such demographic factors could unwittingly endorse systematic biases against certain groups. Ultimately, the legislation could lead to a significant shift in industry practices and may necessitate further discussions about what constitutes fair underwriting criteria in personal automobile insurance.