Texas 2017 - 85th Regular

Texas House Bill HB1490 Compare Versions

Only one version of the bill is available at this time.

Old	New	Differences
1	1	85R6870 BEE-D
2	2	By: Johnson of Dallas H.B. No. 1490
3	3
4	4
5	5	A BILL TO BE ENTITLED
6	6	AN ACT
7	7	relating to prohibiting the use of credit scoring in certain lines
8	8	of personal insurance.
9	9	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
10	10	SECTION 1. Sections 559.001(2), (4), and (7), Insurance
11	11	Code, are amended to read as follows:
12	12	(2) "Agent" means a person licensed or required to be
13	13	licensed as a [general] property and casualty insurance agent [or a
14	14	personal lines property and casualty agent] under Subchapter B, C,
15	15	D, or E, Chapter 4051.
16	16	(4) "Consumer" means an individual whose credit
17	17	information has been reported to or is in the possession of a
18	18	consumer reporting agency or an insurer [is used or whose credit
19	19	score is computed in the underwriting or rating of a personal
20	20	insurance policy]. The term includes an applicant for insurance
21	21	coverage.
22	22	(7) "Credit report" means any written, oral, or other
23	23	communication of information by a consumer reporting agency that[:
24	24	[(A)] bears on a consumer's creditworthiness,
25	25	credit standing, or credit capacity[; and
26	26	[(B) is used or expected to be used or collected
27	27	in whole or in part to serve as a factor to determine personal
28	28	insurance premiums, eligibility for coverage, or tier placement].
29	29	SECTION 2. Section 559.002, Insurance Code, is amended to
30	30	read as follows:
31	31	Sec. 559.002. APPLICABILITY OF CHAPTER. This chapter
32	32	applies to each [an] insurer that writes personal insurance
33	33	coverage [and uses credit information or credit reports for the
34	34	underwriting or rating of that coverage].
35	35	SECTION 3. Section 559.052, Insurance Code, is amended to
36	36	read as follows:
37	37	Sec. 559.052. [PROHIBITED] USE OF CREDIT INFORMATION
38	38	PROHIBITED. (a) An insurer may not:
39	39	(1) use an underwriting guideline [a credit score]
40	40	that is based wholly or partly on the credit information, credit
41	41	report, or credit score of an applicant for insurance coverage or
42	42	any person other than the applicant who would be insured under a
43	43	policy of personal insurance [computed using factors that
44	44	constitute unfair discrimination];
45	45	(2) refuse to underwrite or [deny,] cancel[,] or
46	46	nonrenew a policy of personal insurance based wholly or partly
47	47	[solely] on the [basis of] credit information, credit report, or
48	48	credit score of an applicant for insurance coverage or any person
49	49	other than the applicant who would be insured under the policy
50	50	[without considering any other applicable underwriting factor
51	51	independent of credit information]; [or]
52	52	(3) take an action that results in an adverse effect
53	53	against a consumer because the consumer does not have a credit card
54	54	account;
55	55	(4) charge an applicant for insurance coverage a
56	56	higher premium than otherwise would be charged based wholly or
57	57	partly on the credit information, credit report, or credit score of
58	58	the applicant or any person other than the applicant who would be
59	59	insured under a policy of personal insurance;
60	60	(5) rate a risk based wholly or partly on the credit
61	61	information, credit report, or credit score of an applicant for
62	62	insurance coverage or any person other than the applicant who would
63	63	be insured under a policy of personal insurance, including:
64	64	(A) providing or removing a discount;
65	65	(B) assigning the applicant for insurance
66	66	coverage to a rating tier; or
67	67	(C) placing an applicant for insurance coverage
68	68	with an affiliated company; or
69	69	(6) require a particular payment plan based wholly or
70	70	partly on the credit information, credit report, or credit score of
71	71	the applicant for insurance coverage or any person other than the
72	72	applicant who would be insured under a policy of personal insurance
73	73	[without considering any other applicable factor independent of
74	74	credit information].
75	75	(b) An insurer may not consider an absence of credit
76	76	information or an inability to determine credit information for an
77	77	applicant for insurance coverage or for an insured as a factor in
78	78	underwriting or rating an insurance policy [unless the insurer:
79	79	[(1) has statistical, actuarial, or reasonable
80	80	underwriting information that:
81	81	[(A) is reasonably related to actual or
82	82	anticipated loss experience; and
83	83	[(B) shows that the absence of credit information
84	84	could result in actual or anticipated loss differences;
85	85	[(2) treats the consumer as if the applicant for
86	86	insurance coverage or insured had neutral credit information, as
87	87	defined by the insurer; or
88	88	[(3) excludes the use of credit information as a
89	89	factor in underwriting and uses only other underwriting criteria].
90	90	SECTION 4. Section 559.055, Insurance Code, is amended by
91	91	adding Subsection (c) to read as follows:
92	92	(c) This section expires September 1, 2018.
93	93	SECTION 5. The following laws are repealed:
94	94	(1) Section 559.004(b), Insurance Code;
95	95	(2) Sections 559.003, 559.051, 559.053, 559.054, and
96	96	559.056, Insurance Code; and
97	97	(3) Subchapters C and D, Chapter 559, Insurance Code.
98	98	SECTION 6. (a) The changes in law made by this Act apply
99	99	only to a personal insurance policy:
100	100	(1) that is delivered, issued for delivery, or renewed
101	101	on or after January 1, 2018;
102	102	(2) the application for which is submitted on or after
103	103	January 1, 2018; or
104	104	(3) that is subject to determination of refusal to
105	105	underwrite, cancellation, or nonrenewal on or after January 1,
106	106	2018.
107	107	(b) A personal insurance policy delivered, issued for
108	108	delivery, or renewed before January 1, 2018, or the application for
109	109	which is submitted before January 1, 2018, is governed by the law as
110	110	it existed immediately before January 1, 2018, and that law is
111	111	continued in effect for that purpose.
112	112	SECTION 7. This Act takes effect September 1, 2017.