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A BILL TO BE ENTITLED
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AN ACT
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relating to prohibition of the use of credit scoring in |
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underwriting and rating certain personal lines of insurance |
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coverage. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Section 559.001, Insurance Code, is amended by |
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amending Subdivision (10) and adding Subdivision (12) to read as |
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follows: |
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(10) "Insurer" means an insurer authorized to write |
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property and casualty insurance in this state, including an |
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insurance company, reciprocal or interinsurance exchange, mutual |
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insurance company, capital stock company, county mutual insurance |
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company, farm mutual insurance company, association, Lloyd's plan, |
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or other entity writing personal insurance in this state. The term |
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includes an affiliate, as described by this code, if that affiliate |
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is authorized to write personal insurance in this state. The term |
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does not include [a farm mutual insurance company or] an eligible |
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surplus lines insurer under this code. |
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(12) "Underwriting" means the selection of the risk |
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that will be assumed by an insurer, including the decision whether |
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to accept, deny, renew, nonrenew, reduce, or increase the amount of |
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benefits payable under an insurance policy or the types of |
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coverages available under an insurance policy. |
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SECTION 2. Section 559.002, Insurance Code, is amended to |
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read as follows: |
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Sec. 559.002. APPLICABILITY OF CHAPTER. This chapter |
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applies to an insurer that writes personal insurance coverage [and
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uses credit information or credit reports for the underwriting or
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rating of that coverage]. |
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SECTION 3. Section 559.004, Insurance Code, is amended to |
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read as follows: |
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Sec. 559.004. RULES. [(a)] The commissioner may adopt |
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rules in the manner prescribed by Subchapter A, Chapter 36, as |
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necessary to implement this chapter. |
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[(b)
The commissioner shall adopt rules that prescribe the
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allowable differences in rates charged by insurers due solely to
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the difference in credit scores.] |
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SECTION 4. The heading to Subchapter B, Chapter 559, |
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Insurance Code, is amended to read as follows: |
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SUBCHAPTER B. PROHIBITED USE OF CREDIT SCORING AND |
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CREDIT INFORMATION |
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SECTION 5. Section 559.051, Insurance Code, is amended to |
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read as follows: |
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Sec. 559.051. PROHIBITION ON CERTAIN [PERMISSIBLE] USE OF |
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CREDIT SCORING BY INSURERS. An insurer that writes a line of |
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insurance subject to this chapter may not: |
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(1) refuse to underwrite, cancel, or refuse to renew a |
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risk based wholly or partly on the credit report or credit score of |
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an insured or an applicant for insurance coverage; or |
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(2) rate a risk based wholly or partly on the credit |
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report or credit score of an insured or an applicant for insurance |
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coverage in any manner, including: |
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(A) the provision or removal of a discount; |
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(B) assignment of an insured or an applicant for |
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insurance coverage to a rating tier; or |
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(C) placement of an insured or an applicant for |
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insurance coverage with an affiliate [use credit scoring, except
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for factors that constitute unfair discrimination, to develop
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rates, rating classifications, or underwriting criteria regarding
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lines of insurance subject to this chapter]. |
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SECTION 6. The following laws are repealed: |
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(1) Sections 559.001(1) and (2), Insurance Code; |
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(2) Section 559.003, Insurance Code; |
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(3) Sections 559.052, 559.053, 559.054, 559.055, |
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559.056, and 559.057, Insurance Code; and |
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(4) Subchapters C and D, Chapter 559, Insurance Code. |
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SECTION 7. (a) Chapter 559, Insurance Code, as amended by |
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this Act, applies only to a personal insurance policy: |
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(1) that is delivered, issued for delivery, or renewed |
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on or after January 1, 2014; or |
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(2) the application for which is submitted on or after |
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January 1, 2014. |
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(b) A personal insurance policy delivered, issued for |
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delivery, or renewed before January 1, 2014, or the application for |
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which is submitted before January 1, 2014, is governed by the law as |
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it existed immediately before January 1, 2014, and that law is |
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continued in effect for that purpose. |
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SECTION 8. This Act takes effect September 1, 2013. |