In Texas insurance companies can no longer use credit information as aggressively as in the past because of a 2003 provision that limit the use and application of credit information. If a company uses credit information they must “provide a disclosure statement to the consumer once an insurance application is received notifying the consumer if credit information will be used in rate setting and describes the consumer's rights and protections.”
Here are some Texas consumer rights and protections for insurance credit scores:
- Credit information cannot be the only factor used in an insurer's decision-making process.
- Companies that use credit-history as part of their underwriting process must disclose how they use the information by filing their insurance credit scoring models with TDI. These filings must be actuarially justified.
- A consumer must be provided the right to appeal a ruling that results in higher rates or other adverse actions.
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