By Uresti                                             H.B. No. 1320
         77R2838 MXM-D                           
                                A BILL TO BE ENTITLED
 1-1                                   AN ACT
 1-2     relating to a prohibition of certain underwriting or rating
 1-3     decisions based on credit history; 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.  PROHIBITION OF CERTAIN UNDERWRITING OR RATING
 1-8     DECISIONS BASED ON CREDIT HISTORY
 1-9           Sec. 1.  DEFINITIONS.  In this article:
1-10                 (1)  "Credit history" means information regarding an
1-11     individual's past history of:
1-12                       (A)  financial responsibility;
1-13                       (B)  payment habits; or
1-14                       (C)  creditworthiness.
1-15                 (2)  "Insurer" means an insurer authorized to write
1-16     property and casualty insurance in this state, including:
1-17                       (A)  a county mutual insurance company;
1-18                       (B)  a Lloyd's plan insurer;
1-19                       (C)  a reciprocal or interinsurance exchange; and
1-20                       (D)  a farm mutual company.
1-21           Sec. 2.  APPLICATION.  This article applies only to a
1-22     personal automobile insurance policy.
1-23           Sec. 3.  PROHIBITION; EXEMPTION.  An insurer may not make an
1-24     underwriting or rating decision affecting an individual based in
 2-1     whole or in part on the individual's credit history.
 2-2           Sec. 4.  PENALTY.  An insurer who violates this article
 2-3     commits an unfair practice in violation of Article 21.21 of this
 2-4     code and is subject to the penalties imposed under that article.
 2-5           SECTION 2.  This Act takes effect September 1, 2001, and
 2-6     applies only to an insurance policy that is delivered, issued for
 2-7     delivery, or renewed on or after January 1, 2002.  A policy that is
 2-8     delivered, issued for delivery, or renewed before January 1, 2002,
 2-9     is governed by the law as it existed immediately before the
2-10     effective date of this Act, and that law is continued in effect for
2-11     that purpose.