SB 1644 proposes reforms to the use of consumer credit scores in underwriting and rating certain personal lines of property and casualty insurance in Texas. The bill amends Section 559.054(a) of the Insurance Code and adds a new Section 559.058 to increase transparency and consumer rights regarding credit-based insurance decisions. It mandates that if an insurer takes an adverse action based in part on credit information, they must provide the consumer with detailed notices, including the specific reason for the action, the identity of the credit agency, and information on how to obtain and dispute their credit report. Additionally, it requires insurers to inform consumers of their right to request a re-rating based on updated credit scores.
The bill further introduces requirements for insurers that use credit scoring in setting rates or underwriting policies. Insurers must use a credit report issued within 90 days if they are taking adverse action during issuance or renewal. They are also required to review and update an insured's credit report at least once every 36 months and adjust the policy rating accordingly. Policyholders may also request, once every 12 months, that their policy be re-underwritten and re-rated based on current credit information.
Exemptions to these requirements are provided under specific conditions: if the insured is already receiving the best available rate, if credit scores are not used in underwriting, or if the type of policy does not depend on credit information. The bill applies only to policies delivered, issued for delivery, or renewed on or after January 1, 2026. This legislation seeks to ensure fairer, more responsive insurance practices by making credit-based decisions more reflective of an individual’s current financial situation.
The originally filed version of SB 1644 differs from the Committee Substitute in several key ways, reflecting a refinement and expansion of consumer protections and insurer obligations as the bill progressed.
First, the originally filed bill introduced a new Section 559.058 to the Insurance Code, requiring insurers that use credit scoring to reassess a consumer’s credit report at least every 36 months and to adjust policy premiums accordingly. It mandated that insurers provide written notice of any changes to the insured's premium based on an updated credit score, including the date of the update, a description of how it affected the premium, and information about the insured’s rights. Importantly, it allowed consumers to opt out of credit score updates entirely.
In contrast, the Committee Aubstitute version removed the consumer opt-out provision and instead embedded stronger consumer rights by expanding Section 559.054(a). It now requires insurers to notify policyholders of their right to request re-underwriting and re-rating at renewal if adverse action was taken based on credit data. Additionally, the substitute made the consumer’s ability to request re-rating more active, stating insurers “shall” honor such requests once every 12 months—rather than limiting this to policy renewals with opt-outs.
Second, the Committee Substitute clarifies the exceptions where insurers are not required to update ratings: if the consumer is already in the most favorable tier, if credit scoring isn’t used, or if the product type doesn't rely on it. While both versions include these exceptions, the committee substitute tightens the structure of this provision and ensures better integration with existing statute by amending Section 559.054 directly.
Lastly, the committee version emphasizes electronic or written notice flexibility, removes some technical redundancies, and more precisely aligns with existing Insurance Code notice requirements. It reflects a more polished legislative draft and a stronger commitment to consumer fairness, particularly regarding transparency and opportunities for credit score re-evaluation.
These differences suggest a legislative intent to ensure not only insurer accountability but also proactive consumer empowerment and clarity throughout the credit-based insurance rating process.
Contact the Author
Sen. Charles Schwertner
