By Burnam H.B. No. 2891
Line and page numbers may not match official copy.
Bill not drafted by TLC or Senate E&E.
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to legislative review of the use of credit histories as an
1-3 underwriting guideline.
1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-5 SECTION 1. JOINT INTERIM COMMITTEE ON THE USE OF CREDIT
1-6 HISTORIES AS AN UNDERWRITING GUIDELINE. (a) The lieutenant
1-7 governor and the speaker of the house of representatives shall
1-8 appoint a joint interim committee to study the use of credit
1-9 histories as an underwriting guideline.
1-10 (b) The committee shall:
1-11 (1) conduct research regarding the use of credit
1-12 histories as an underwriting guideline by insurers in writing a
1-13 line of insurance subject to this article.
1-14 (2) examine the effect of those guidelines and whether
1-15 their use results in discrimination by an insurer against an
1-16 applicant for insurance of an insured because of the person's:
1-17 (A) race or ethnicity;
1-18 (B) economic status; or
1-19 (C) geographic area a indicated by the person's
1-20 zip code.
1-21 (3) develop recommendations regarding the use of
1-22 credit histories as an underwriting guideline; and
1-23 (4) address any other issues related to underwriting
2-1 guidelines as determined by the committee.
2-2 (c) Each insurer shall cooperate with the committee in the
2-3 research. The committee may require an insurer to submit to the
2-4 committee copies of the underwriting guidelines used by the insurer
2-5 in writing insurance policies subject to this article. The insurer
2-6 shall submit the underwriting guidelines in the form prescribed by
2-7 the committee.
2-8 (d) In conducting the research required by this article, the
2-9 committee shall comply with the confidentiality requirements
2-10 regarding underwriting guidelines under Section 38.002 of this
2-11 code.
2-12 (e) The Texas Department of Insurance shall assist the
2-13 committee in conducting the study required by this Act at the
2-14 direction of the committee, using funds appropriated to the
2-15 department for that purpose or using other funds appropriated to
2-16 the department. At the direction of the committee, the department
2-17 shall contract with other entities to assist in conducting all or
2-18 part of the study required by this Act.
2-19 (f) The committee shall submit a report and recommendations
2-20 to the legislature in a manner established in the order of the
2-21 lieutenant governor and speaker of the house representatives that
2-22 appoints the committee and shall operate according to procedures
2-23 established in that order.
2-24 (g) The committee shall complete the report and
2-25 recommendations required by this Act not later than January 1,
2-26 2003. This Act expires and the committee is abolished June 1,
3-1 2003.
3-2 (h) Definitions. In this act:
3-3 (1) "Credit history" means information regarding an
3-4 individual's past history of:
3-5 (A) financial responsibility;
3-6 (B) payment habits; or
3-7 (C) credit worthiness.
3-8 (2) "Insurer" means an insurer authorized to write
3-9 property and casualty insurance in this state, including:
3-10 (A) a county mutual insurance company;
3-11 (B) a Lloyd's plan;
3-12 (C) a reciprocal or interinsurance exchange; and
3-13 (D) a farm mutual company.
3-14 (3) "Underwriting guideline" means a rule, standard,
3-15 marketing decision, or practice that is used by an insurer or an
3-16 agent of an insurer to examine, bind, accept, reject, cancel, or
3-17 limit insurance coverage to groups of consumers of insurance.
3-18 (i) Application. This article applies to:
3-19 (1) a private passenger motor vehicle insurance
3-20 policy;
3-21 (2) a homeowner's or farm or ranch owner's insurance
3-22 policy; and
3-23 (3) a standard fire insurance policy for a one-family
3-24 dwelling, a duplex, or the contents of a one-family dwelling, a
3-25 duplex, or an apartment.
3-26 SECTION 2. This Act takes effect immediately if it receives
4-1 a vote of two-thirds of all the members elected to each house, as
4-2 provided by Section 39, Article III, Texas Constitution. If this
4-3 Act does not receive the vote necessary for immediate effect, this
4-4 Act takes effect September 1, 2001.