Relating to prohibition of the use of credit scoring in underwriting and rating certain personal lines of insurance coverage.
Impact
The enactment of SB72 fundamentally alters state laws related to insurance underwriting processes, specifically regarding how insurers evaluate applicants for personal lines of insurance. The bill effectively curtails the influence of credit-based evaluations in determining eligibility and premiums, which proponents argue could prevent discrimination against individuals who may have poor credit due to extenuating circumstances. Furthermore, the bill stipulates that any personal insurance policies delivered or renewed after January 1, 2014, will adhere to these new regulations, promoting uniformity in handling insurance applications across the state.
Summary
SB72 aims to prohibit the use of credit scoring in the underwriting and rating of personal lines of insurance coverage in Texas. By restricting insurers from using credit reports or credit scores to make decisions regarding underwriting, cancellations, and renewals of insurance policies, the bill seeks to enhance consumer protection and ensure fair treatment of all applicants for insurance. The bill makes notable amendments to the Texas Insurance Code to officially define and enforce these prohibitions, thereby impacting how insurers assess risk and establish premiums for personal insurance.
Sentiment
The sentiment surrounding SB72 appears to be generally positive among consumers and advocacy groups who support the elimination of credit scoring in insurance. Advocates for the bill argue that it will lead to more equitable insurance practices and help mitigate unfair discrimination. On the contrary, some insurance industry representatives express concern that this legislation may limit an insurer's ability to accurately assess risk. This tension underscores broader conversations about consumer rights versus business operational practices in the insurance sector.
Contention
Notable points of contention arise from the opposing views on the implications of removing credit scoring from underwriting decisions. While supporters celebrate the bill as a move toward greater fairness in insurance markets, critics warn that it might increase the risk for insurers and could subsequently lead to higher premiums for all consumers. The potential for rising costs and reduced insurance options poses a significant concern for some stakeholders, outlining the delicate balance between consumer protection and the sustainability of the insurance industry.
Relating to consideration by insurers of certain prohibited criteria for ratemaking and coverage decisions and the use of disparate impact analysis regarding certain insurance practices.
Relating to the reporting of lost or stolen firearms and to proof of loss for personal property insurance coverage for those firearms; creating a criminal offense.
Relating to professional liability insurance coverage for and prohibitions on providing to certain children procedures and treatments for gender transitioning, gender reassignment, or gender dysphoria; creating a criminal offense.
Relating to professional liability insurance coverage for and prohibitions on the provision to certain children of procedures and treatments for gender transitioning, gender reassignment, or gender dysphoria.
Relating to professional liability insurance coverage for and prohibitions on the provision to certain children of procedures and treatments for gender transitioning, gender reassignment, or gender dysphoria and to the abuse of a child.