The Texas Department of Insurance (TDI) has issued a reminder to carriers that Insurance Code Section 559.103 provides for exceptions to the use of credit scores affected by certain events, including temporary job loss.
TDI said the exemption applies following the disaster declaration issued by Gov. Greg Abbot in response to the COVID-19 pandemic.
Insurance Code Section 559.103 allows an insurer to grant an exception to an insurer’s rates, rating classifications, or underwriting rules for a consumer whose credit information has been directly influenced by:
- catastrophic illness or injury;
- the death of a spouse, child, or parent;
- temporary loss of employment;
- divorce; or
- identity theft.
An insurer may consider only credit information not affected by the event or must assign a neutral credit score.
TDI encourages insurers to accept verbal requests for credit exceptions in lieu of written requests as stated in Insurance Code Section 559.103.
Insurance Code Section 559.103 applies to personal insurance, which includes personal automobile, residential property, residential fire and allied lines insurance policies, and it also applies to noncommercial insurance policies covering a boat, personal watercraft, snowmobile, or recreational vehicle.
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