Relating to prohibition of the use of credit scoring in underwriting and rating certain personal lines of insurance coverage.
Impact
If enacted, SB79 would significantly alter how personal insurance products are priced and underwritten in Texas. Insurers would no longer be able to deny coverage or charge higher rates based on an individual's credit score or credit report. This change may allow more individuals to obtain insurance coverage who previously faced barriers due to their credit history. However, by restricting how insurers evaluate risk, the bill could have implications for the overall pricing structure of insurance products in the market, possibly leading to higher rates across the board as insurers adjust to the new regulations.
Summary
Senate Bill 79 (SB79) aims to prohibit insurers from using credit scoring or credit information in the underwriting and rating process for certain personal lines of insurance coverage. This legislation responds to growing concerns about the fairness of using credit scores, which can disproportionately affect consumers with lower credit ratings, potentially leading to higher premiums or denial of coverage. By banning this practice, the bill seeks to enhance consumer protection and ensure that the insurance market remains accessible to all individuals, regardless of their credit history.
Contention
The bill has generated discussions around the balance between consumer protection and the ability of insurance companies to manage risk effectively. Proponents argue that the use of credit scoring in underwriting is inherently discriminatory and does not reflect an individual's actual risk profile. Conversely, opponents may contend that eliminating this factor in underwriting might result in unsound risk assessment practices, thereby destabilizing the insurance market. Key stakeholders, including consumer advocacy groups and insurance organizations, are likely to have differing views on how the bill will impact consumers and the 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.