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Bill

HB 2741

Relating to prohibiting the use of credit scoring in certain lines of personal insurance.

89th Legislature (2025) Introduced by Trey Martinez Fischer

Texas bill prohibits insurers from using credit scores in personal insurance pricing, potentially raising rates for creditworthy consumers while limiting insurer risk assessment tools.

Left pending in committee
#creditreports(s4587) #creditscoring(s0521) #insurance--insurers&agents(i0425) #insurance--property&casualty(i0442)
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Bill Summary · HB 2741

Legislative bill overview

HB 2741 would prohibit insurance companies in Texas from using credit scores as a factor in determining rates, underwriting decisions, or policy renewal for personal insurance lines. The bill restricts an established pricing tool that insurers have long relied upon to assess risk and set premiums.

Why is this important

Credit-based insurance scoring affects millions of Texans' insurance costs, with studies showing significant rate variations based on credit history. Supporters argue this practice disproportionately impacts lower-income consumers and those with medical debt unrelated to driving behavior, while opponents contend credit scores correlate with claim likelihood and their elimination could increase premiums for safer drivers.

Potential points of contention

  • Rate implications: Removing credit scoring could increase premiums for consumers with good credit and driving records, potentially raising costs for responsible drivers who benefited from the scoring system
  • Actuarial basis: Insurers argue credit scores have statistical correlation with claims frequency; restricting their use may conflict with risk-based pricing principles and regulatory frameworks
  • Market competitiveness: The restriction could disadvantage Texas insurers competing nationally and internationally where credit scoring remains standard practice
  • Insurance affordability paradox: While intended to help lower-income consumers, eliminating risk-segmentation tools could raise overall market rates, potentially harming the very populations the bill aims to protect

Compiled from official sources — confirm details with the bill’s official record.

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