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A BILL TO BE ENTITLED
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AN ACT
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relating to the use of a consumer's credit score in the underwriting |
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or rating of certain personal lines property and casualty insurance |
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policies. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Section 559.053(b), Insurance Code, is amended |
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to read as follows: |
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(b) Except as provided by Section 559.058(b), if [If] a |
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policy is issued to the applicant for insurance coverage, an |
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insurer or agent is not required to make the disclosure required |
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under Subsection (a) on any subsequent renewal of the coverage. |
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SECTION 2. Subchapter B, Chapter 559, Insurance Code, is |
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amended by adding Section 559.058 to read as follows: |
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Sec. 559.058. POLICY RE-RATING BASED ON UPDATED CREDIT |
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SCORE. (a) An insurer that uses credit scoring in the underwriting |
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or rating of insurance subject to this chapter shall: |
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(1) use a consumer's credit report issued not more than |
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90 days before the date the policy is first issued or renewed; |
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(2) review and update the credit report of an insured |
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not less than every 36 months; and |
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(3) reassess the insured's policy rating and adjust |
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premiums based on the updated credit score. |
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(b) An insurer must provide written notice to the insured of |
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any change in the insured's credit score and premiums. The notice |
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must include: |
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(1) the date of the credit score update; |
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(2) a description of how the updated credit score was |
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used to calculate any change to the insured's premium, if |
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applicable; and |
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(3) a description of the insured's rights under |
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Subsection (c) and Sections 559.054 and 559.055. |
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(c) On renewal of an insurance policy, the insurer: |
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(1) shall, on request of an insured or the insured's |
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agent, re-underwrite and re-rate the policy based upon a current |
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credit report or insurance score, not exceeding once each 12-month |
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period; and |
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(2) may obtain an insured's credit score in accordance |
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with the insurer's underwriting guidelines, regardless of whether |
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the renewal occurs before the expiration of the 36-month period |
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described by Subsection (a)(2). |
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(d) An insurer is not required to update an insured's credit |
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score and policy rating under this section if: |
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(1) the insured in writing opts out of credit score |
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updates; |
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(2) the insured is in the most favorably priced tier of |
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the insurer within a group of affiliated insurers; |
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(3) credit scoring is not used in the underwriting or |
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rating of the insurance policy; or |
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(4) the insured's insurance product or type of |
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coverage does not rely on credit scoring as a factor. |
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SECTION 3. Subchapter B, Chapter 559, Insurance Code, as |
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amended by this Act, applies only to an insurance policy that is |
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delivered, issued for delivery, or renewed on or after January 1, |
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2026. |
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SECTION 4. This Act takes effect September 1, 2025. |