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A BILL TO BE ENTITLED
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AN ACT
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relating to disclosure of credit scoring by insurers. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Section 559.051, Insurance Code, is amended to |
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read as follows: |
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Sec. 559.051. PERMISSIBLE USE OF CREDIT SCORING; |
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ADVERTISEMENT. (a) An insurer may use credit scoring, except for |
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factors that constitute unfair discrimination, to develop rates, |
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rating classifications, or underwriting criteria regarding lines |
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of insurance subject to this chapter. |
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(b) A person may not use an advertisement for or display on |
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an Internet website an insurance product from a line of insurance |
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that uses credit scoring under Subsection (a) unless the |
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advertisement or website includes in a prominent place the |
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following language or similar language: "In connection with this |
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insurance product, we may review your credit report or obtain or use |
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a credit score based on the information contained in that credit |
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report. We may use a third party in connection with the development |
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of your credit score." |
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SECTION 2. Sections 559.053(a), (b), and (c), Insurance |
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Code, are amended to read as follows: |
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(a) An insurer that uses credit scoring in the underwriting |
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or rating of insurance subject to this chapter shall disclose to |
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each applicant for insurance coverage that the applicant's credit |
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report may be used in the underwriting or rating of the applicant's |
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policy. The disclosure must be provided at the time of application |
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by the insurer or agent and may be given [orally,] in writing[,] or |
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electronically. |
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(b) If a policy is issued to the applicant for insurance |
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coverage, an insurer or agent shall [is not required to] make the |
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disclosure required under Subsection (a) on any subsequent renewal |
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of the coverage. |
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(c) An insurer or its agent shall disclose to its customers, |
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in writing or electronically, on a form adopted by the |
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commissioner, whether credit information will be obtained on an |
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applicant for insurance coverage or insured or on any other member |
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or members of the applicant's or insured's household and used as |
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part of the insurance credit scoring process. |
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SECTION 3. This Act applies only to an insurance policy or |
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contract or evidence of coverage that is delivered, issued for |
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delivery, or renewed on or after January 1, 2010. An insurance |
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policy or contract or evidence of coverage delivered, issued for |
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delivery, or renewed before January 1, 2010, is governed by the law |
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as it existed immediately before the effective date of this Act, and |
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that law is continued in effect for that purpose. |
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SECTION 4. This Act takes effect September 1, 2009. |