Texas 2025 - 89th Regular

Texas Senate Bill SB1644 Compare Versions

Version 1 (Old)

Version 2 (New)

Old	New		Differences
1	1		By: Schwertner S.B. No. 1644
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	2	+	(In the Senate - Filed February 25, 2025; March 11, 2025,
	3	+	read first time and referred to Committee on Business & Commerce;
	4	+	April 2, 2025, reported adversely, with favorable Committee
	5	+	Substitute by the following vote: Yeas 11, Nays 0; April 2, 2025,
	6	+	sent to printer.)
	7	+	Click here to see the committee vote
	8	+	COMMITTEE SUBSTITUTE FOR S.B. No. 1644 By: Kolkhorst
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6	11		A BILL TO BE ENTITLED
7	12		AN ACT
8	13		relating to the use of a consumer's credit score in the underwriting
9	14		or rating of certain personal lines property and casualty insurance
10	15		policies.
11	16		BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
12	17		SECTION 1. Section 559.054(a), Insurance Code, is amended
13	18		to read as follows:
14	19		(a) If, based in whole or in part on information contained
15	20		in a credit report, an insurer takes an action resulting in an
16	21		adverse effect with respect to an applicant for insurance coverage
17	22		or insured, the insurer shall provide to the applicant or insured
18	23		within 30 days:
19	24		(1) written or electronic notice of the action
20	25		resulting in an adverse effect and the reasons for that action;
21	26		(2) the name, address, and telephone number of the
22	27		consumer reporting agency, including a toll-free number
23	28		established by the agency and the agency's Internet website, if
24	29		applicable;
25	30		(3) written or electronic notice that the consumer
26	31		reporting agency did not make the decision to take the action
27	32		resulting in an adverse effect and will be unable to provide the
28	33		applicant or insured the specific reasons why the action was taken;
29	34		[and]
30	35		(4) written or electronic notice of the applicant's or
31	36		insured's right to:
32	37		(A) obtain a free copy of the consumer's credit
33	38		report from the consumer reporting agency during the 60-day period
34	39		after the date of the notice; and
35	40		(B) dispute with the consumer reporting agency
36	41		the accuracy or completeness of any information in the consumer's
37	42		credit report furnished by the agency; and
38	43		(5) if applicable, written or electronic notice of the
39	44		insured's right to request the insurer re-underwrite and re-rate
40	45		the insured's insurance policy under Section 559.058(b)(1).
41	46		SECTION 2. Subchapter B, Chapter 559, Insurance Code, is
42	47		amended by adding Section 559.058 to read as follows:
43	48		Sec. 559.058. POLICY RE-RATING BASED ON UPDATED CREDIT
44	49		SCORE. (a) An insurer that uses credit scoring in the underwriting
45	50		or rating of insurance subject to this chapter shall:
46	51		(1) use a consumer's credit report issued not more than
47	52		90 days before the date the policy is first issued or renewed if the
48	53		insurer uses the report information to take an action that results
49	54		in an adverse effect with respect to the insured;
50	55		(2) review and update the credit report of an insured
51	56		not less than every 36 months; and
52	57		(3) reassess the insured's policy rating and adjust
53	58		premiums based on the updated credit score.
54	59		(b) On renewal of an insurance policy, the insurer:
55	60		(1) shall, on request of an insured or the insured's
56	61		agent, re-underwrite and re-rate the policy based upon a current
57	62		credit report or insurance score, not exceeding once each 12-month
58	63		period; and
59	64		(2) may obtain an insured's credit score in accordance
60	65		with the insurer's underwriting guidelines, regardless of whether
61	66		the renewal occurs before the expiration of the 36-month period
62	67		described by Subsection (a)(2).
63	68		(c) An insurer is not required to update an insured's credit
64	69		score and policy rating under this section if:
65	70		(1) the insured is in the most favorably priced tier of
66	71		the insurer within a group of affiliated insurers;
67	72		(2) credit scoring is not used in the underwriting or
68	73		rating of the insurance policy; or
69	74		(3) the insured's insurance product or type of
70	75		coverage does not rely on credit scoring as a factor.
71	76		SECTION 3. Subchapter B, Chapter 559, Insurance Code, as
72	77		amended by this Act, applies only to an insurance policy that is
73	78		delivered, issued for delivery, or renewed on or after January 1,
74	79		2026. An insurance policy delivered, issued for delivery, or
75	80		renewed before January 1, 2026, is governed by the law as it existed
76	81		immediately before the effective date of this Act, and that law is
77	82		continued in effect for that purpose.
78	83		SECTION 4. This Act takes effect September 1, 2025.
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