Relating to the use of a consumer's credit score in the underwriting or rating of certain personal lines property and casualty insurance policies, the official text

S.B. No. 1644

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 559.054(a), Insurance Code, is amended

to read as follows:

(a) If, based in whole or in part on information contained

in a credit report, an insurer takes an action resulting in an

adverse effect with respect to an applicant for insurance coverage

or insured, the insurer shall provide to the applicant or insured

within 30 days:

(1) written or electronic notice of the action

resulting in an adverse effect and the reasons for that action;

(2) the name, address, and telephone number of the

consumer reporting agency, including a toll-free number

established by the agency and the agency's Internet website, if

applicable;

(3) written or electronic notice that the consumer

reporting agency did not make the decision to take the action

resulting in an adverse effect and will be unable to provide the

applicant or insured the specific reasons why the action was taken;

[and]

(4) written or electronic notice of the applicant's or

insured's right to:

(A) obtain a free copy of the consumer's credit

report from the consumer reporting agency during the 60-day period

after the date of the notice; and

(B) dispute with the consumer reporting agency

the accuracy or completeness of any information in the consumer's

credit report furnished by the agency; and

(5) if applicable, written or electronic notice of the

insured's right to request the insurer re-underwrite and re-rate

the insured's insurance policy under Section 559.058(b)(1).

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 if the

insurer uses the report information to take an action that results

in an adverse effect with respect to the insured;

(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) 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).

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

score and policy rating under this section if:

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

the insurer within a group of affiliated insurers;

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

rating of the insurance policy; or

(3) 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. An insurance policy delivered, issued for delivery, or

renewed before January 1, 2026, is governed by the law as it existed

immediately before the effective date of this Act, and that law is

continued in effect for that purpose.

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

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President of the Senate
Speaker of the House

I hereby certify that S.B. No. 1644 passed the Senate on

April 10, 2025, by the following vote: Yeas 29, Nays 0, one

present not voting.

______________________________

Secretary of the Senate

I hereby certify that S.B. No. 1644 passed the House on

May 28, 2025, by the following vote: Yeas 131, Nays 10, two

present not voting.

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Chief Clerk of the House

Approved:

______________________________

Date

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Governor