85R1727 SCL-D
 
  By: White H.B. No. 127
 
 
 
A BILL TO BE ENTITLED
 
AN ACT
  relating to the use of credit scoring in the underwriting and rating
  of certain insurance policies.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
         SECTION 1.  Subchapter A, Chapter 559, Insurance Code, is
  amended by adding Section 559.0025 to read as follows:
         Sec. 559.0025.  SUSPENSION OF USE OF CREDIT SCORING. (a) An
  insurer may not use credit scoring in the underwriting or rating of
  an insurance policy to which this chapter applies and that is
  delivered, issued for delivery, or renewed on or after January 1,
  2018.
         (b)  This section expires January 1, 2020.
         SECTION 2.  (a) In this section:
               (1)  "Commissioner" means the commissioner of
  insurance.
               (2)  "Committee" means the Committee on Insurer Use of
  Credit Scoring.
         (b)  The commissioner shall establish the Committee on
  Insurer Use of Credit Scoring to develop and make recommendations
  on whether credit scoring should be used in the underwriting or
  rating of insurance and if so, how the use of credit scoring may be
  improved. The recommendations must also specifically address the
  question of whether the lack of a credit score should ever influence
  insurance rates.
         (c)  The committee is composed of nine members appointed by
  the commissioner as follows:
               (1)  at least one representative of the insurance
  industry;
               (2)  at least one representative of the Office of
  Public Insurance Counsel;
               (3)  at least one policyholder who is not affiliated
  with the insurance industry; and
               (4)  other members who represent one of the categories
  listed in Subdivisions (1), (2), and (3) of this subsection.
         (d)  The commissioner shall designate one member to serve as
  the presiding officer of the committee.
         (e)  A committee member is not entitled to compensation for
  service on the committee but is entitled to reimbursement for
  actual and necessary expenses incurred in performing committee
  duties.
         (f)  The committee shall meet at least quarterly on the call
  of the presiding officer. Committee meetings are subject to the
  open meetings law, Chapter 551, Government Code.
         (g)  The Texas Department of Insurance shall provide
  administrative support for the committee. Funding for the
  administrative and operational expenses of the committee shall be
  provided from the department's existing budget.
         (h)  The committee's development of recommendations under
  this section must be based on a study of the effects of the use of
  credit scoring in the underwriting and rating of insurance.  The
  study must, at a minimum, address and include findings regarding:
               (1)  the effect of credit scoring on:
                     (A)  the elderly;
                     (B)  young people; and
                     (C)  people with little or no credit history,
  including wealthy people;
               (2)  the range of effects that credit scoring has on
  insurance rates; and
               (3)  the rate of errors in computing credit scores.
         (i)  The committee shall prepare a written report of the
  committee's findings and recommendations under this section. The
  committee shall deliver the report to the governor, the lieutenant
  governor, and all members of the legislature not later than
  December 1, 2018.
         (j)  The committee is abolished and this section expires June
  1, 2019.
         SECTION 3.  This Act takes effect September 1, 2017.