Amend CSSB 14 by striking Section 2.02 (on page 35, line 22 
through page 38, line 16) and substituting the following:
	SECTION 2.02.  Subchapter E, Chapter 21, Insurance Code, is 
amended by adding Article 21.49-2V to read as follows:
	Article 21.49-2V.  Regulation of Underwriting Guidelines.               
	Sec. 1.  DEFINITIONS.  In this article:                                 
		(1)  "Actuarially sound" means the underwriting 
guideline is shown to differentiate among consumers who have 
different expected costs associated with the transfer of risk, all 
other relevant factors being the same.  The burden of proof in any 
proceeding regarding whether an underwriting guideline is 
actuarially sound shall be on the party that used or intends to use 
the underwriting guideline to show that the underwriting guideline 
is actuarially sound.
		(2)  "Credit scoring" and "insurance scoring" mean an 
underwriting guideline based in whole or in part on information 
related to an individual's credit, credit worthiness, credit 
standing, credit capacity, credit history, payment habits, or 
financial responsibility.
		(3)  "Person" means any individual, insurance company, 
reciprocal or interinsurance exchange, mutual, farm mutual 
insurance company, capital stock company, fraternal benefit 
society, local mutual aid association, county mutual insurance 
company, association, Lloyd's plan company, farm mutual company, 
and any other legal entity engaged in the business of insurance, 
including agents.
		(4)  "Personal automobile insurance" means an 
automobile insurance policy providing insurance coverages for the 
ownership, maintenance, or use of private passenger, utility, and 
miscellaneous type motor vehicles and trailers including mobile 
homes and recreational trailers, and not primarily used for the 
delivery of goods, materials, or services, unless such use is in 
farm or ranch operations and provided that such vehicles are owned 
or leased by an individual or individuals.
		(5)  "Residential property insurance" means insurance 
against loss to real or tangible personal property at a fixed 
location provided in a homeowners policy, a tenant policy, a 
condominium owners policy, or a residential fire and allied lines 
policy.
		(6)  "Underwriting guideline" means a rule, standard, 
marketing decision, guideline, or practice, whether written, oral 
or electronic, used by an insurer or its agent to examine, bind, 
accept, reject, renew, nonrenew, cancel, or limit coverages made 
available to classes of consumers or individual consumers.
	Sec. 2.  PROHIBITION.  No person shall use an underwriting 
guideline for personal automobile insurance or residential 
property insurance, other than underwriting guidelines covered in 
section 3 of this article, without the prior approval of the 
commissioner.  If the commissioner has not issued an order 
approving the filing within 30 days after the filing of the 
application, the insurer may request a hearing on the application, 
to be held at the State Office of Administrative Hearings under 
Government Code Chapter 2001.  The burden of proof in any such 
hearing shall be on the insurer.  The hearings examiner must issue a 
proposal for decision within 30 days after the filing of the request 
for a hearing.  The hearings examiner's proposed order shall be 
final unless the commissioner issues a different order within 15 
days after the commissioner receives the proposed order.
	Sec. 3.  PERMISSIBLE UNDERWRITING GUIDELINES.  An insurer is 
not required to obtain the commissioner's approval to use an 
underwriting guideline that complies with paragraph (1), (2), or 
(3) of this section:
		(1)  Underwriting guidelines for personal automobile 
insurance that are based on the following characteristics:
			(A)  average miles driven in a year or other 
specified time period; 
			(B)  accidents in which a person to be insured 
under the policy can reasonably be considered to have been at fault 
and which resulted in bodily injury or property damage;
			(C)  a final conviction in any court in the United 
States, forfeiture of bond, or payment of a fine or an amount 
accepted by the court if the conviction, forfeiture or payment was a 
result of an allegation that a violation of a law regulating the 
operation of motor vehicles was committed;
			(D)  the making of a fraudulent insurance claim; 
or                 
			(E)  number of years of driving experience or 
number of years licensed to drive.
		(2)  Underwriting guidelines for residential property 
insurance that are based on the following characteristics:
			(A)  the physical condition of the property to be 
insured, provided the underwriting guideline has specific and 
objective measures to evaluate the hazard;
			(B)  claim experience on a residential property 
policy arising out of the owner's negligence;
			(C)  if a structure to be insured is vacant or 
unoccupied for more than 60 days;
			(D)  the making of a fraudulent insurance claim; 
or                 
			(E)  an act of arson.                                                 
		(3)  underwriting guidelines promulgated by the 
commissioner by rule, if the commissioner determines after a 
hearing that the underwriting guideline:
			(A)  is actuarially sound;                                            
			(B)  promotes the mitigation of losses; and                           
			(C)  does not have an adverse impact based on 
income level.         
	Sec. 4.  PRIOR APPROVAL STANDARDS.  The commissioner shall 
not approve the use of an underwriting guideline unless the 
underwriting guideline:
		(A)  is actuarially sound;                                             
		(B)  promotes the mitigation of losses; and                            
		(C)  does not have an adverse impact based on income 
level.