SRC-MAX H.B. 671 75(R) BILL ANALYSIS
Senate Research Center H.B. 671
By: Alvarado (Ellis)
Economic Development
5-18-97
Engrossed
DIGEST
Currently, an insurer may base certain underwriting decisions upon a
person's credit history even though one's credit history has no direct
connection to one's need for or ability to pay for insurance coverage.
This bill sets forth provisions regarding a prohibition of certain
underwriting decisions based on credit reports and provides a penalty for
certain violations.
PURPOSE
As proposed, H.B. 671 sets forth provisions regarding a prohibition of
certain underwriting decisions based on credit reports and provides a
penalty for certain violations.
RULEMAKING AUTHORITY
This bill does not grant any additional rulemaking authority to a state
officer, institution, or agency.
SECTION BY SECTION ANALYSIS
SECTION 1. Amends Chapter 21B, Insurance Code, by adding Article 21.21-9,
as follows:
Art. 21.21-9. PROHIBITION OF CERTAIN UNDERWRITING DECISIONS BASED ON
CREDIT REPORTS.
Sec. 1. DEFINITIONS. Defines "credit report" and "insurer."
Sec. 2. APPLICATION. Provides that this article applies to certain
types of policies.
Sec. 3. PROHIBITIONS; EXEMPTION. Prohibits an insurer from making an
underwriting decision based in whole or in part on a credit report.
Provides that this section does not prohibit an insurer from refusing to
allow premium payment in installments for a person whose failure to pay
premiums for an insurance policy caused a lapse in that policy during the
two years preceding the date on which the request to pay premiums in
installments is made.
Sec. 4. PENALTY. Provides that an insurer who violates this article
commits an unfair practice in violation of Article 21.21 of this code and
is subject to the penalties imposed under that article
SECTION 2. Effective date: September 1, 1997, only for an insurance policy
delivered, issued for deliver, or renewed on or after January 1, 1998.
Makes application of this Act prospective.
SECTION 3. Emergency clause.