| 1 | 1 | | By: Watson S.B. No. 736 |
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| 2 | 2 | | (Smithee) |
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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 insurance rating and underwriting practices and |
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| 8 | 8 | | declinations based on certain consumer inquiries. |
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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. Chapter 544, Insurance Code, is amended by |
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| 11 | 11 | | adding Subchapter L to read as follows: |
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| 12 | 12 | | SUBCHAPTER L. CONSUMER INQUIRY |
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| 13 | 13 | | Sec. 544.551. DEFINITION. In this subchapter, "consumer |
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| 14 | 14 | | inquiry" has the meaning assigned by Section 551.113 for "customer |
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| 15 | 15 | | inquiry." |
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| 16 | 16 | | Sec. 544.552. APPLICABILITY. This subchapter applies only |
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| 17 | 17 | | to a standard fire, homeowners, or farm and ranch owners insurance |
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| 18 | 18 | | policy. |
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| 19 | 19 | | Sec. 544.553. PROHIBITION OF UNDERWRITING AND RATING |
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| 20 | 20 | | DECISIONS BASED ON CONSUMER INQUIRY. An insurer may not: |
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| 21 | 21 | | (1) use an underwriting guideline based solely on |
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| 22 | 22 | | whether a consumer inquiry has been made by or on behalf of the |
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| 23 | 23 | | applicant or insured; or |
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| 24 | 24 | | (2) charge a rate that is different from the rate |
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| 25 | 25 | | charged to other individuals for the same coverage or increase a |
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| 26 | 26 | | rate charged to an insured based solely on whether a consumer |
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| 27 | 27 | | inquiry has been made by or on behalf of the applicant or insured. |
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| 28 | 28 | | SECTION 2. The heading to Section 551.113, Insurance Code, |
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| 29 | 29 | | is amended to read as follows: |
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| 30 | 30 | | Sec. 551.113. DECLINATION, NONRENEWAL, OR CANCELLATION |
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| 31 | 31 | | PROHIBITED; CONSIDERATION OF CONSUMER INQUIRY [CERTAIN CLAIMS]. |
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| 32 | 32 | | SECTION 3. Section 551.113, Insurance Code, is amended by |
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| 33 | 33 | | adding Subsection (b-1) to read as follows: |
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| 34 | 34 | | (b-1) An insurer may not consider a customer inquiry as a |
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| 35 | 35 | | basis for nonrenewal or cancellation of an insurance policy. |
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| 36 | 36 | | SECTION 4. This Act applies only to an insurance policy that |
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| 37 | 37 | | is delivered, issued for delivery, or renewed on or after the |
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| 38 | 38 | | effective date of this Act. A policy delivered, issued for |
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| 39 | 39 | | delivery, or renewed before the effective date of this Act is |
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| 40 | 40 | | governed by the law as it existed immediately before the effective |
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| 41 | 41 | | date of this Act, and that law is continued in effect for that |
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| 42 | 42 | | purpose. |
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| 43 | 43 | | SECTION 5. This Act takes effect September 1, 2013. |
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