|
|
|
A BILL TO BE ENTITLED
|
|
AN ACT
|
|
relating to prohibition of the use of credit scoring in |
|
underwriting and rating certain personal lines of insurance |
|
coverage. |
|
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
|
SECTION 1. Section 559.001, Insurance Code, is amended by |
|
amending Subdivision (10) and adding Subdivision (12) to read as |
|
follows: |
|
(10) "Insurer" means an insurer authorized to write |
|
property and casualty insurance in this state, including an |
|
insurance company, reciprocal or interinsurance exchange, mutual |
|
insurance company, capital stock company, county mutual insurance |
|
company, farm mutual insurance company, association, Lloyd's plan, |
|
or other entity writing personal insurance in this state. The term |
|
includes an affiliate, as described by this code, if that affiliate |
|
is authorized to write personal insurance in this state. The term |
|
does not include [a farm mutual insurance company or] an eligible |
|
surplus lines insurer under this code. |
|
(12) "Underwriting" means the selection of the risk |
|
that will be assumed by an insurer, including the decision whether |
|
to accept, deny, renew, nonrenew, reduce, or increase the amount of |
|
benefits payable under an insurance policy or the types of |
|
coverages available under an insurance policy. |
|
SECTION 2. Section 559.002, Insurance Code, is amended to |
|
read as follows: |
|
Sec. 559.002. APPLICABILITY OF CHAPTER. This chapter |
|
applies to an insurer that writes personal insurance coverage [and
|
|
uses credit information or credit reports for the underwriting or
|
|
rating of that coverage]. |
|
SECTION 3. Section 559.004, Insurance Code, is amended to |
|
read as follows: |
|
Sec. 559.004. RULES. [(a)] The commissioner may adopt |
|
rules in the manner prescribed by Subchapter A, Chapter 36, as |
|
necessary to implement this chapter. |
|
[(b)
The commissioner shall adopt rules that prescribe the
|
|
allowable differences in rates charged by insurers due solely to
|
|
the difference in credit scores.] |
|
SECTION 4. The heading to Subchapter B, Chapter 559, |
|
Insurance Code, is amended to read as follows: |
|
SUBCHAPTER B. PROHIBITED USE OF CREDIT SCORING AND |
|
CREDIT INFORMATION |
|
SECTION 5. Section 559.051, Insurance Code, is amended to |
|
read as follows: |
|
Sec. 559.051. PROHIBITION ON CERTAIN [PERMISSIBLE] USE OF |
|
CREDIT SCORING BY INSURERS. An insurer that writes a line of |
|
insurance subject to this chapter may not: |
|
(1) refuse to underwrite, cancel, or refuse to renew a |
|
risk based wholly or partly on the credit report or credit score of |
|
an insured or an applicant for insurance coverage; or |
|
(2) rate a risk based wholly or partly on the credit |
|
report or credit score of an insured or an applicant for insurance |
|
coverage in any manner, including: |
|
(A) the provision or removal of a discount; |
|
(B) assignment of an insured or an applicant for |
|
insurance coverage to a rating tier; or |
|
(C) placement of an insured or an applicant for |
|
insurance coverage with an affiliate [use credit scoring, except
|
|
for factors that constitute unfair discrimination, to develop
|
|
rates, rating classifications, or underwriting criteria regarding
|
|
lines of insurance subject to this chapter]. |
|
SECTION 6. The following laws are repealed: |
|
(1) Sections 559.001(1) and (2), Insurance Code; |
|
(2) Section 559.003, Insurance Code; |
|
(3) Sections 559.052, 559.053, 559.054, 559.055, |
|
559.056, and 559.057, Insurance Code; and |
|
(4) Subchapters C and D, Chapter 559, Insurance Code. |
|
SECTION 7. (a) Chapter 559, Insurance Code, as amended by |
|
this Act, applies only to a personal insurance policy that is |
|
delivered, issued for delivery, or renewed on or after January 1, |
|
2016. |
|
(b) A personal insurance policy delivered, issued for |
|
delivery, or renewed before January 1, 2016, is governed by the law |
|
as it existed immediately before January 1, 2016, and that law is |
|
continued in effect for that purpose. |
|
SECTION 8. This Act takes effect September 1, 2015. |