bill requiring fresh credit reports for insurance pricing

The text as introduced · 469 words

89R11475 SCF-F

By: Smithee
H.B. No. 3021

A BILL TO BE ENTITLED

AN ACT

relating to the use of a consumer's credit score in the underwriting

or rating of certain personal lines property and casualty insurance

policies.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

SECTION 1. Section 559.053(b), Insurance Code, is amended

to read as follows:

(b) Except as provided by Section 559.058(b), if [ If ] a

policy is issued to the applicant for insurance coverage, an

insurer or agent is not required to make the disclosure required

under Subsection (a) on any subsequent renewal of the coverage.

SECTION 2. Subchapter B, Chapter 559, Insurance Code, is

amended by adding Section 559.058 to read as follows:

Sec. 559.058. POLICY RE-RATING BASED ON UPDATED CREDIT

SCORE. (a) An insurer that uses credit scoring in the underwriting

or rating of insurance subject to this chapter shall:

(1) use a consumer's credit report issued not more than

90 days before the date the policy is first issued or renewed;

(2) review and update the credit report of an insured

not less than every 36 months; and

(3) reassess the insured's policy rating and adjust

premiums based on the updated credit score.

(b) An insurer must provide written notice to the insured of

any change in the insured's credit score and premiums. The notice

must include:

(1) the date of the credit score update;

(2) a description of how the updated credit score was

used to calculate any change to the insured's premium, if

applicable; and

(3) a description of the insured's rights under

Subsection (c) and Sections 559.054 and 559.055.

(c) On renewal of an insurance policy, the insurer:

(1) shall, on request of an insured or the insured's

agent, re-underwrite and re-rate the policy based upon a current

credit report or insurance score, not exceeding once each 12-month

period; and

(2) may obtain an insured's credit score in accordance

with the insurer's underwriting guidelines, regardless of whether

the renewal occurs before the expiration of the 36-month period

described by Subsection (a)(2).

(d) An insurer is not required to update an insured's credit

score and policy rating under this section if:

(1) the insured in writing opts out of credit score

updates;

(2) the insured is in the most favorably priced tier of

the insurer within a group of affiliated insurers;

(3) credit scoring is not used in the underwriting or

rating of the insurance policy; or

(4) the insured's insurance product or type of

coverage does not rely on credit scoring as a factor.

SECTION 3. Subchapter B, Chapter 559, Insurance Code, as

amended by this Act, applies only to an insurance policy that is

delivered, issued for delivery, or renewed on or after January 1,

2026.

SECTION 4. This Act takes effect September 1, 2025.