By: Wise H.B. No. 81
A BILL TO BE ENTITLED
AN ACT
relating to a prohibition of certain underwriting decisions based
on credit reports; providing a penalty.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Subchapter B, Chapter 21, Insurance Code, is
amended by adding Article 21.21-11 to read as follows:
Art. 21.21-11. PROHIBITION OF CERTAIN UNDERWRITING
DECISIONS BASED ON CREDIT REPORTS
Sec. 1. DEFINITIONS. In this article:
(1) "Credit report" means a report regarding an
individual's:
(A) financial responsibility;
(B) payment habits; or
(C) creditworthiness.
(2) "Insurer" means an insurer authorized to write
property and casualty insurance in this state, including:
(A) a county mutual insurance company;
(B) a Lloyd's plan insurer;
(C) a reciprocal or interinsurance exchange; and
(D) a farm mutual company.
Sec. 2. APPLICATION. This article applies to:
(1) a personal automobile insurance policy;
(2) a homeowner's or farm or ranch owner's insurance
policy; and
(3) a standard fire insurance policy for a one-family
dwelling, a duplex, or the contents of a one-family dwelling, a
duplex, or an apartment.
Sec. 3. PROHIBITION; EXEMPTION. (a) An insurer may not make
an underwriting decision based in whole or in part on a credit
report.
(b) This section does not prohibit an insurer from refusing
to allow premium payment in installments for a person whose failure
to pay premiums for an insurance policy caused a lapse in that
policy during the two years preceding the date on which the request
to pay premiums in installments is made.
Sec. 4. PENALTY. An insurer who violates this article
commits an unfair practice in violation of Article 21.21 of this
code and is subject to the penalties imposed under that article.
SECTION 2. This Act takes effect September 1, 2003, and
applies only to an insurance policy that is delivered, issued for
delivery, or renewed on or after January 1, 2002. A policy that is
delivered, issued for delivery, or renewed before January 1, 2004,
is governed by the law as it existed immediately before the
effective date of this Act, and that law is continued in effect for
that purpose.