He added that "placing an arbitrary cap on how much rates can vary based on credit-based insurance scores will have a negative impact on most consumers."

Meanwhile, consumer groups continue to express their opposition to the use of credit scores in insurance pricing, whether with a 10 percent increase ceiling or otherwise. Doug Heller, a consumer advocate with the Santa Monica, Calif.-based Foundation for Taxpayer and Consumer Rights, said that "limiting a bad practice, rather than getting rid of it entirely, is not sufficient."

On Nov. 10, the department adopted initial rules regarding the use of credit scoring by insurers in Texas. Under those rules, insurers using credit information must provide a disclosure statement to the consumer once an insurance application is received.

The disclosure notifies potential policyholders if credit scoring will be used in rate-setting and describes the consumer's rights and protections.

The department has now proposed amended rules that include the 10 percent limitation. The proposal fulfills a promise made last month by Texas insurance commissioner Jose Montemayor to "propose an amendment to these rules to set further limitations and to establish variances to prevent unnecessary rate increases."

Opposing any limitation on the use of credit scores, NAII cites a study on the connection between credit history and insurance risk conducted by Bloomington, Ill.-based EPIC Actuaries LLC, which concluded that policyholders with the lowest insurance scores cost insurers on average 33 percent more to insure, while those with the highest scores cost insurers 19 percent less.

Consumer advocate Mr. Heller countered that credit scores are used by the insurance industry as a "surrogate for poverty" and should be totally banned in the premium calculation process.

"There is no place for the use of credit history in insurance?it is not like a loan," Mr. Heller stressed. "What does credit history have to due with the chance that wind will damage the shingles on your roof?"