By Burnam H.B. No. 2892
77R8678 PB-D
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to examination by the Texas Department of Insurance of the
1-3 use of credit histories in certain underwriting guidelines.
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 21.21-13 to read as follows:
1-7 Art. 21.21-13. EXAMINATION OF USE OF CERTAIN UNDERWRITING
1-8 GUIDELINES
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;
1-19 (C) a reciprocal or interinsurance exchange; and
1-20 (D) a farm mutual company.
1-21 (3) "Underwriting guideline" means a rule, standard,
1-22 marketing decision, or practice that is used by an insurer or an
1-23 agent of an insurer to examine, bind, accept, reject, cancel, or
1-24 limit insurance coverage to groups of consumers of insurance.
2-1 Sec. 2. APPLICATION. This article applies to:
2-2 (1) a private passenger motor vehicle insurance
2-3 policy;
2-4 (2) a homeowner's or farm or ranch owner's insurance
2-5 policy; and
2-6 (3) a standard fire insurance policy for a one-family
2-7 dwelling, a duplex, or the contents of a one-family dwelling, a
2-8 duplex, or an apartment.
2-9 Sec. 3. DEPARTMENT RESEARCH. (a) The department shall
2-10 conduct research as required by this article regarding the use of
2-11 credit histories as underwriting guidelines by insurers in writing
2-12 a line of insurance subject to this article.
2-13 (b) The department shall examine the effect of those
2-14 guidelines and whether their use results in discrimination by an
2-15 insurer against an applicant for insurance or an insured because of
2-16 the person's:
2-17 (1) race or ethnicity;
2-18 (2) economic status; or
2-19 (3) geographic area as indicated by the person's zip
2-20 code.
2-21 (c) Each insurer shall cooperate with the department in the
2-22 research. The commissioner may require an insurer to submit to the
2-23 department copies of the underwriting guidelines used by the
2-24 insurer in writing insurance policies subject to this article. The
2-25 insurer shall submit the underwriting guidelines in the form
2-26 prescribed by the commissioner.
2-27 (d) In conducting the research required by this article, the
3-1 department shall comply with the confidentiality requirements
3-2 regarding underwriting guidelines under Section 38.002 of this
3-3 code.
3-4 Sec. 4. REPORT. Not later than February 1 of each
3-5 odd-numbered year, the commissioner shall report in writing the
3-6 results of the research required by this article to the governor,
3-7 lieutenant governor, speaker of the house of representatives, and
3-8 the members of the legislature.
3-9 Sec. 5. RULES. The commissioner may adopt rules as
3-10 necessary to implement this article.
3-11 SECTION 2. This Act takes effect immediately if it receives
3-12 a vote of two-thirds of all the members elected to each house, as
3-13 provided by Section 39, Article III, Texas Constitution. If this
3-14 Act does not receive the vote necessary for immediate effect, this
3-15 Act takes effect September 1, 2001.