HB3021 - Relating to the use of a consumer's credit score in the underwriting or rating of certain personal lines property and casualty insurance policies.

  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.