82R363 KCR-F
	By: Walle	H.B. No. 194

	A BILL TO BE ENTITLED
	AN ACT
	relating to prohibiting the use of credit scoring in certain lines
	of personal insurance.
	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
	SECTION 1.  Sections 559.001(2), (4), and (7), Insurance
	Code, are amended to read as follows:
	(2)  "Agent" means a person licensed or required to be
	licensed as a [general] property and casualty insurance agent [or a
	personal lines property and casualty agent] under Subchapter B, C,
	D, or E, Chapter 4051.
	(4)  "Consumer" means an individual whose credit
	information has been reported to or is in the possession of a
	consumer reporting agency or an insurer [is used or whose credit
	score is computed in the underwriting or rating of a personal
	insurance policy].  The term includes an applicant for insurance
	coverage.
	(7)  "Credit report" means any written, oral, or other
	communication of information by a consumer reporting agency that[:
	[(A)]  bears on a consumer's creditworthiness,
	credit standing, or credit capacity[; and
	[(B)  is used or expected to be used or collected
	in whole or in part to serve as a factor to determine personal
	insurance premiums, eligibility for coverage, or tier placement].
	SECTION 2.  Section 559.002, Insurance Code, is amended to
	read as follows:
	Sec. 559.002.  APPLICABILITY OF CHAPTER. This chapter
	applies to each [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 559.052, Insurance Code, is amended to
	read as follows:
	Sec. 559.052.  [PROHIBITED] USE OF CREDIT INFORMATION
	PROHIBITED. (a) An insurer may not:
	(1)  use an underwriting guideline [a credit score]
	that is based wholly or partly on the credit information, credit
	report, or credit score of an applicant for insurance coverage or
	any person other than the applicant who would be insured under a
	policy of personal insurance [computed using factors that
	constitute unfair discrimination];
	(2)  refuse to underwrite or [deny,] cancel[,] or
	nonrenew a policy of personal insurance based wholly or partly
	[solely] on the [basis of] credit information, credit report, or
	credit score of an applicant for insurance coverage or any person
	other than the applicant who would be insured under the policy
	[without considering any other applicable underwriting factor
	independent of credit information]; [or]
	(3)  take an action that results in an adverse effect
	against a consumer because the consumer does not have a credit card
	account;
	(4)  charge an applicant for insurance coverage a
	higher premium than otherwise would be charged based wholly or
	partly on the credit information, credit report, or credit score of
	the applicant or any person other than the applicant who would be
	insured under a policy of personal insurance;
	(5)  rate a risk based wholly or partly on the credit
	information, credit report, or credit score of an applicant for
	insurance coverage or any person other than the applicant who would
	be insured under a policy of personal insurance, including:
	(A)  providing or removing a discount;
	(B)  assigning the applicant for insurance
	coverage to a rating tier; or
	(C)  placing an applicant for insurance coverage
	with an affiliated company; or
	(6)  require a particular payment plan based wholly or
	partly on the credit information, credit report, or credit score of
	the applicant for insurance coverage or any person other than the
	applicant who would be insured under a policy of personal insurance
	[without considering any other applicable factor independent of
	credit information].
	(b)  An insurer may not consider an absence of credit
	information or an inability to determine credit information for an
	applicant for insurance coverage or for an insured as a factor in
	underwriting or rating an insurance policy [unless the insurer:
	[(1)  has statistical, actuarial, or reasonable
	underwriting information that:
	[(A)  is reasonably related to actual or
	anticipated loss experience; and
	[(B)  shows that the absence of credit information
	could result in actual or anticipated loss differences;
	[(2)  treats the consumer as if the applicant for
	insurance coverage or insured had neutral credit information, as
	defined by the insurer; or
	[(3)  excludes the use of credit information as a
	factor in underwriting and uses only other underwriting criteria].
	SECTION 4.  Section 559.055, Insurance Code, is amended by
	adding Subsection (c) to read as follows:
	(c)  This section expires September 1, 2012.
	SECTION 5.  The following laws are repealed:
	(1)  Section 559.004(b), Insurance Code;
	(2)  Sections 559.003, 559.051, 559.053, 559.054, and
	559.056, Insurance Code; and
	(3)  Subchapters C and D, Chapter 559, Insurance Code.
	SECTION 6.  (a)  The changes in law made by this Act apply
	only to a personal insurance policy:
	(1)  that is delivered, issued for delivery, or renewed
	on or after January 1, 2012;
	(2)  the application for which is submitted on or after
	January 1, 2012; or
	(3)  that is subject to determination of denial,
	cancellation, or nonrenewal on or after January 1, 2012.
	(b)  A personal insurance policy delivered, issued for
	delivery, or renewed before January 1, 2012, or the application for
	which is submitted before January 1, 2012, is governed by the law as
	it existed immediately before January 1, 2012, and that law is
	continued in effect for that purpose.
	SECTION 7.  This Act takes effect September 1, 2011.