Texas 2025 - 89th Regular

Texas House Bill HB2741 Compare Versions

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1	1	By: Martinez Fischer H.B. No. 2741
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6	6	A BILL TO BE ENTITLED
7	7	AN ACT
8	8	relating to prohibiting the use of credit scoring in certain lines
9	9	of personal insurance.
10	10	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
11	11	SECTION 1. Sections 559.001(2), (4), and (7), Insurance
12	12	Code, are amended to read as follows:
13	13	(2) "Agent" means a person licensed or required to be
14	14	licensed as a [general] property and casualty insurance agent [or a
15	15	personal lines property and casualty agent] under Subchapter B, C,
16	16	or E, Chapter 4051.
17	17	(4) "Consumer" means an individual whose credit
18	18	information has been reported to or is in the possession of a
19	19	consumer reporting agency or an insurer [is used or whose credit
20	20	score is computed in the underwriting or rating of a personal
21	21	insurance policy]. The term includes an applicant for insurance
22	22	coverage.
23	23	(7) "Credit report" means any written, oral, or other
24	24	communication of information by a consumer reporting agency that[:
25	25	[(A)] bears on a consumer's creditworthiness,
26	26	credit standing, or credit capacity[; and
27	27	[(B) is used or expected to be used or collected
28	28	in whole or in part to serve as a factor to determine personal
29	29	insurance premiums, eligibility for coverage, or tier placement].
30	30	SECTION 2. Section 559.002, Insurance Code, is amended to
31	31	read as follows:
32	32	Sec. 559.002. APPLICABILITY OF CHAPTER. This chapter
33	33	applies to each [an] insurer that writes personal insurance
34	34	coverage [and uses credit information or credit reports for the
35	35	underwriting or rating of that coverage].
36	36	SECTION 3. Section 559.052, Insurance Code, is amended to
37	37	read as follows:
38	38	Sec. 559.052. [PROHIBITED] USE OF CREDIT INFORMATION
39	39	PROHIBITED. (a) An insurer may not:
40	40	(1) use an underwriting guideline [a credit score]
41	41	that is based wholly or partly on the credit information, credit
42	42	report, or credit score of an applicant for insurance coverage or
43	43	any person other than the applicant who would be insured under a
44	44	policy of personal insurance [computed using factors that
45	45	constitute unfair discrimination];
46	46	(2) refuse to underwrite or [deny,] cancel[,] or
47	47	nonrenew a policy of personal insurance based wholly or partly
48	48	[solely] on the [basis of] credit information, credit report, or
49	49	credit score of an applicant for insurance coverage or any person
50	50	other than the applicant who would be insured under the policy
51	51	[without considering any other applicable underwriting factor
52	52	independent of credit information]; [or]
53	53	(3) take an action that results in an adverse effect
54	54	against a consumer because the consumer does not have a credit card
55	55	account;
56	56	(4) charge an applicant for insurance coverage a
57	57	higher premium than otherwise would be charged based wholly or
58	58	partly on the credit information, credit report, or credit score of
59	59	the applicant or any person other than the applicant who would be
60	60	insured under a policy of personal insurance;
61	61	(5) rate a risk based wholly or partly on the credit
62	62	information, credit report, or credit score of an applicant for
63	63	insurance coverage or any person other than the applicant who would
64	64	be insured under a policy of personal insurance, including:
65	65	(A) providing or removing a discount;
66	66	(B) assigning the applicant for insurance
67	67	coverage to a rating tier; or
68	68	(C) placing an applicant for insurance coverage
69	69	with an affiliated company [without considering any other
70	70	applicable factor independent of credit information]; or
71	71	(6) require a particular payment plan based wholly or
72	72	partly on the credit information, credit report, or credit score of
73	73	the applicant for insurance coverage or any person other than the
74	74	applicant who would be insured under a policy of personal
75	75	insurance.
76	76	(b) An insurer may not consider an absence of credit
77	77	information or an inability to determine credit information for an
78	78	applicant for insurance coverage or for an insured as a factor in
79	79	underwriting or rating an insurance policy [unless the insurer:
80	80	[(1) has statistical, actuarial, or reasonable
81	81	underwriting information that:
82	82	[(A) is reasonably related to actual or
83	83	anticipated loss experience; and
84	84	[(B) shows that the absence of credit information
85	85	could result in actual or anticipated loss differences;
86	86	[(2) treats the consumer as if the applicant for
87	87	insurance coverage or insured had neutral credit information, as
88	88	defined by the insurer; or
89	89	[(3) excludes the use of credit information as a
90	90	factor in underwriting and uses only other underwriting criteria].
91	91	SECTION 4. Section 559.055, Insurance Code, is amended by
92	92	adding Subsection (c) to read as follows:
93	93	(c) This section expires September 1, 2026.
94	94	SECTION 5. The following laws are repealed:
95	95	(1) Section 559.004(b), Insurance Code;
96	96	(2) Sections 559.003, 559.051, 559.053, 559.054, and
97	97	559.056, Insurance Code; and
98	98	(3) Subchapters C and D, Chapter 559, Insurance Code.
99	99	SECTION 6. (a) The changes in law made by this Act apply
100	100	only to a personal insurance policy:
101	101	(1) that is delivered, issued for delivery, or renewed
102	102	on or after January 1, 2026;
103	103	(2) the application for which is submitted on or after
104	104	January 1, 2026; or
105	105	(3) that is subject to determination of refusal to
106	106	underwrite, cancellation, or nonrenewal on or after January 1,
107	107	2026.
108	108	(b) A personal insurance policy delivered, issued for
109	109	delivery, or renewed before January 1, 2026, or the application for
110	110	which is submitted before January 1, 2026, is governed by the law as
111	111	it existed immediately before January 1, 2026, and that law is
112	112	continued in effect for that purpose.
113	113	SECTION 7. This Act takes effect September 1, 2025.