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Rep.Guillen, Ryan

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Rep. Ryan Guillen says House voted to ban use of credit scoring  print page

by: Rep. Guillen, Ryan
05/27/2003

AUSTIN -- "Sky-high insurance costs have been one of the biggest complaints we receive from constituents when we meet and talk with them, and the Texas House of Representatives voted this week to help out insurance consumers," Representative Ryan Guillen announced this week.

"One of the big victories we had this week was denying the use of credit scoring in setting insurance rates in the House version of the insurance reform bill," Guillen said, adding that he felt the use of credit scoring was unfair in many cases and penalized people for things as simple as the number of times their credit had been checked, even when they have good credit.

Homeowners insurance rates have increased on average 45 percent since 2001, and the bill gives the state more oversight of insurance premiums. Nearly all homeowners insurance rates in Texas are now unregulated.

Rules on how to get control over prices differ between the House and Senate versions of the bill. The Senate bill sets some restrictions on the use of credit history, but still allows it to be used for setting insurance premiums.
In the Senate, Lt. Gov. David Dewhurst opposed the ban and said it was better to control the use of a "known element."

"I can tell you that there was a lot of pressure from the insurance lobby after we voted to delete credit scoring, but most of the members agree that we just have not seen any good arguments that rates for home insurance or auto insurance should be based on a credit report," Guillen said.

"In the House we voted to allow insurance companies to start charging new, lower insurance rates as soon as the governor signs the legislation into law. The insurance commissioner, Jose Montemayor, will have the authority to reduce rates still further if he feels they are too high," Guillen explained.

The rates would be frozen for one year except to allow for rate reductions. After a year, when a home or auto insurance company wants to raise its rates, it would file the rates with the insurance commissionerís office and if the commissioner objected to the rates, then a public hearing would be held.

Under the Senate proposal, however, insurers would file their rates with the department and then wait for Mr. Montemayor to sign off on the increase. If Mr. Montemayor takes no action within 60 days, the rates would take effect.

FOR IMMEDIATE RELEASE
From the office of: State Representative Ryan Guillen
District 31: Duval, Starr, Webb and Zapata Counties

For more information contact:
Communications Director Robert McVey
(robert.mcvey@house.state.tx.us)
Office 512-463-0416 -- Cell 512-779-8914 -- Home 512-374-9525 FAX 512-463-1012

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