77R7986 MXM-D
By Wise, Uresti, Hupp, et al. H.B. No. 530
Substitute the following for H.B. No. 530:
By Lewis of Tarrant C.S.H.B. No. 530
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to underwriting decisions based on credit reports;
1-3 providing a penalty.
1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-5 SECTION 1. Subchapter B, Chapter 21, Insurance Code, is
1-6 amended by adding Article 21.21-11 to read as follows:
1-7 Art. 21.21-11. UNDERWRITING DECISIONS BASED ON CREDIT
1-8 REPORTS
1-9 Sec. 1. DEFINITIONS. In this article:
1-10 (1) "Credit report" means a report regarding an
1-11 individual's:
1-12 (A) financial responsibility;
1-13 (B) payment habits;
1-14 (C) credit capacity; or
1-15 (D) creditworthiness.
1-16 (2) "Insurer" means an insurer authorized to write
1-17 property and casualty insurance in this state, including:
1-18 (A) a county mutual insurance company;
1-19 (B) a Lloyd's plan;
1-20 (C) a reciprocal or interinsurance exchange; and
1-21 (D) a farm mutual company.
1-22 Sec. 2. APPLICATION. This article applies to:
1-23 (1) a personal automobile insurance policy;
1-24 (2) a homeowner's or farm or ranch owner's insurance
2-1 policy; and
2-2 (3) a standard fire insurance policy for a one-family
2-3 dwelling, a duplex, or the contents of a one-family dwelling, a
2-4 duplex, or an apartment.
2-5 Sec. 3. GENERAL RULE. (a) An insurer must provide its
2-6 standards on the use of credit reports to the commissioner and the
2-7 office of public insurance counsel before the insurer may make an
2-8 underwriting decision based in whole or in part on a credit report.
2-9 (b) The standards provided under Subsection (a) must include
2-10 information sufficient to analyze the propriety of the reports for
2-11 underwriting purposes, including any algorithm, computer program,
2-12 model, or other process that reduces the data to a number or
2-13 rating.
2-14 (c) This section does not prohibit an insurer from refusing
2-15 to allow premium payment in installments for a person whose failure
2-16 to pay premiums for an insurance policy caused a lapse in that
2-17 policy during the two years preceding the date on which the request
2-18 to pay premiums in installments is made.
2-19 Sec. 4. CONFIDENTIALITY. (a) An insurer that provides
2-20 information to the commissioner or the office of public insurance
2-21 counsel under this article may ask the commissioner to determine
2-22 whether the information is confidential under Section 552.110,
2-23 Government Code.
2-24 (b) Until the commissioner makes the determination, the
2-25 information is confidential.
2-26 (c) A determination that the information is confidential
2-27 does not apply to a hearing or other proceeding to determine
3-1 whether an insurer has violated an antidiscrimination law of this
3-2 state.
3-3 Sec. 5. PENALTY. An insurer who violates this article
3-4 commits an unfair practice in violation of Article 21.21 of this
3-5 code and is subject to the penalties imposed under that article.
3-6 SECTION 2. This Act takes effect September 1, 2001, and
3-7 applies only to an insurance policy that is delivered, issued for
3-8 delivery, or renewed on or after January 1, 2002. A policy that is
3-9 delivered, issued for delivery, or renewed before January 1, 2002,
3-10 is governed by the law as it existed immediately before the
3-11 effective date of this Act, and that law is continued in effect for
3-12 that purpose.