83R941 TJS-F
By: Ellis S.B. No. 72
A BILL TO BE ENTITLED
AN ACT
relating to prohibition of the use of credit scoring in
underwriting and rating certain personal lines of insurance
coverage.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 559.001, Insurance Code, is amended by
amending Subdivision (10) and adding Subdivision (12) to read as
follows:
(10) "Insurer" means an insurer authorized to write
property and casualty insurance in this state, including an
insurance company, reciprocal or interinsurance exchange, mutual
insurance company, capital stock company, county mutual insurance
company, farm mutual insurance company, association, Lloyd's plan,
or other entity writing personal insurance in this state. The term
includes an affiliate, as described by this code, if that affiliate
is authorized to write personal insurance in this state. The term
does not include [a farm mutual insurance company or] an eligible
surplus lines insurer under this code.
(12) "Underwriting" means the selection of the risk
that will be assumed by an insurer, including the decision whether
to accept, deny, renew, nonrenew, reduce, or increase the amount of
benefits payable under an insurance policy or the types of
coverages available under an insurance policy.
SECTION 2. Section 559.002, Insurance Code, is amended to
read as follows:
Sec. 559.002. APPLICABILITY OF CHAPTER. This chapter
applies to an insurer that writes personal insurance coverage [and
uses credit information or credit reports for the underwriting or
rating of that coverage].
SECTION 3. Section 559.004, Insurance Code, is amended to
read as follows:
Sec. 559.004. RULES. [(a)] The commissioner may adopt
rules in the manner prescribed by Subchapter A, Chapter 36, as
necessary to implement this chapter.
[(b) The commissioner shall adopt rules that prescribe the
allowable differences in rates charged by insurers due solely to
the difference in credit scores.]
SECTION 4. The heading to Subchapter B, Chapter 559,
Insurance Code, is amended to read as follows:
SUBCHAPTER B. PROHIBITED USE OF CREDIT SCORING AND
CREDIT INFORMATION
SECTION 5. Section 559.051, Insurance Code, is amended to
read as follows:
Sec. 559.051. PROHIBITION ON CERTAIN [PERMISSIBLE] USE OF
CREDIT SCORING BY INSURERS. An insurer that writes a line of
insurance subject to this chapter may not:
(1) refuse to underwrite, cancel, or refuse to renew a
risk based wholly or partly on the credit report or credit score of
an insured or an applicant for insurance coverage; or
(2) rate a risk based wholly or partly on the credit
report or credit score of an insured or an applicant for insurance
coverage in any manner, including:
(A) the provision or removal of a discount;
(B) assignment of an insured or an applicant for
insurance coverage to a rating tier; or
(C) placement of an insured or an applicant for
insurance coverage with an affiliate [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].
SECTION 6. The following laws are repealed:
(1) Sections 559.001(1) and (2), Insurance Code;
(2) Section 559.003, Insurance Code;
(3) Sections 559.052, 559.053, 559.054, 559.055,
559.056, and 559.057, Insurance Code; and
(4) Subchapters C and D, Chapter 559, Insurance Code.
SECTION 7. (a) Chapter 559, Insurance Code, as amended by
this Act, applies only to a personal insurance policy:
(1) that is delivered, issued for delivery, or renewed
on or after January 1, 2014; or
(2) the application for which is submitted on or after
January 1, 2014.
(b) A personal insurance policy delivered, issued for
delivery, or renewed before January 1, 2014, or the application for
which is submitted before January 1, 2014, is governed by the law as
it existed immediately before January 1, 2014, and that law is
continued in effect for that purpose.
SECTION 8. This Act takes effect September 1, 2013.