Fillable Printable Use Of Credit Information Disclosure
Fillable Printable Use Of Credit Information Disclosure
Use Of Credit Information Disclosure
PC328 CD-1| 0710
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USE OF CREDIT INFORMATION DISCLOSURE
Insurer’s Name
Address
Telephone Number (toll free if available)
We will will not (choose one) obtain and use credit information on you or any other
member(s) of your household as a part of the insurance credit scoring process.
If you have questions regarding this disclosure, contact the insurer at the above address or
phone number. For information or other questions, contact the Texas Department of Insurance
at 1-800-578-4677 or PO Box 149104, MC 104-PC, Austin, Texas 78714.
Section 559.053 of the Texas Insurance Code requires an insurer or its agents to disclose to its customers
whether credit information will be obtained on the applicant or insured or on any other member(s) of the
applicant’s or insured’s household and used as part of the insurance credit scoring process.
If credit information is obtained or used on the applicant or insured, or on any member of the applicant’s or
insured’s household, the insurer shall disclose to the applicant the name of each person on whom credit
information was obtained or used and how each person’s credit information was used to underwrite or rate
the policy. An insurer may provide this information with this disclosure or in a separate notice.
Adverse effect means an action taken by an insurer in connection with the underwriting of insurance for a
consumer that results in the denial of coverage, the cancellation or nonrenewal of coverage, or the offer to
and acceptance by a consumer of a policy form, premium rate, or deductible other than the policy form,
premium rate, or deductible for which the consumer specifically applied.
Credit information is any credit related information derived from a credit report itself, or provided in an
application for personal insurance. The term does not include information that is not credit-related,
regardless of whether the information is contained in a credit report or in an application for insurance
coverage or is used to compute a credit score.
Credit score or insurance score is a number or rating derived from a mathematical formula, computer
application, model, or other process that is based on credit information and used to predict the future
insurance loss exposure of a consumer.
SUMMARY OF CONSUMER PROTECTIONS CONTAINED IN CHAPTER 559
PROHIBITED USE OF CREDIT INFORMATION
. An insurer may not:
(1) use a credit score that is computed using factors that constitute unfair discrimination;
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(2) deny, cancel, or nonrenew a policy of personal insurance solely on the basis of credit information without
consideration of 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 without consideration of any other applicable factor independent of credit information.
An insurer may not consider an absence of credit information or an inability to determine credit information
for an applicant for insurance coverage or 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.
NEGATIVE FACTORS. An insurer may not use any of the following as a negative factor in any credit scoring
methodology or in reviewing credit information to underwrite or rate a policy of personal insurance:
(1) a credit inquiry that is not initiated by the consumer;
(2) an inquiry relating to insurance coverage, if so identified on a consumer's credit report; or
(3) a collection account with a medical industry code, if so identified on the consumer's credit
report.
Multiple lender inquiries made within 30 days of a prior inquiry, if coded by the consumer reporting agency
on the consumer's credit report as from the home mortgage or motor vehicle lending industry, shall be
considered by an insurer as only one inquiry.
EFFECT OF EXTRAORDINARY EVENTS. An insurer shall, on written request from an applicant for
insurance coverage or an insured, provide reasonable exceptions to the insurer's rates, rating classifications,
or underwriting rules for a consumer whose credit information has been directly influenced by a catastrophic
illness or injury, by the death of a spouse, child, or parent, by temporary loss of employment, by divorce, or
by identity theft. In such a case, the insurer may consider only credit information not affected by the event
or shall assign a neutral credit score.
An insurer may require reasonable written and independently verifiable documentation of the event and the
effect of the event on the person's credit before granting an exception. An insurer is not required to consider
repeated events or events the insurer reconsidered previously as an extraordinary event.
An insurer may also consider granting an exception to an applicant for insurance coverage or an insured for
an extraordinary event not listed in this section. An insurer is not out of compliance with any law or rule
relating to underwriting, rating, or rate filing as a result of granting an exception under this article.
NOTICE OF ACTION RESULTING IN ADVERSE EFFECT. If an insurer takes an action resulting in an
adverse effect with respect to an applicant for insurance coverage or insured based in whole or in part on
information contained in a credit report, the insurer must provide to the applicant or insured within 30 days
certain information regarding how an applicant or insured may verify and dispute information contained in
a credit report.
DISPUTE RESOLUTION; ERROR CORRECTION. If it is determined through the dispute resolution process
established under Section 611(a)(5), Fair Credit Reporting Act (15 U.S.C. Section 1681i), as amended, that
the credit information of a current insured was inaccurate or incomplete or could not be verified and the
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insurer receives notice of that determination from the consumer reporting agency or from the insured, the
insurer shall re-underwrite and re-rate the insured not later than the 30th day after the date of receipt of
the notice.
After re-underwriting or re-rating the insured, the insurer shall make any adjustments necessary within 30
days, consistent with the insurer's underwriting and rating guidelines. If an insurer determines that the
insured has overpaid premium, the insurer shall credit the amount of overpayment. The insurer shall
compute the overpayment back to the shorter of the last 12 months of coverage; or the actual policy period
.
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