National Association of Independent Insurers
2600 River Road, Des Plaines, IL 60018-3286
Credit-based Insurance Scoring Legislation – 2003
Status of Legislation as of Mar. 26, 2003
Alaska:
HB 5 Status: In House Committee on Labor and Commerce
Prohibits an insurer or underwriter from using a person's credit rating or credit score
when determining a standard, rate, or rating plan for an applicant or insured.
HB 47 Status: In House Committee on Labor and Commerce
Prohibits an insurer or underwriter from using a person's credit rating or credit score
when determining a standard, rate, or rating plan for an applicant or insured.
SB 13 Status: Senate Committee on Judiciary
An Act prohibiting discrimination in insurance rates based on credit rating or credit
scoring. It prohibits discrimination in insurance rates based on credit rating or credit
scoring.
Arizona:
HB 2032 Status: Passed House Mar. 5 – Approved in Senate Committee on
Finance Mar 24
Requires an insurer making an adverse underwriting decision based on credit
information contained or not contained in a consumer's report, to provide in addition to
other information, a description of at least four factors contributing to the adverse action
and the resulting insurance score. Prohibits insurers from utilizing an insurance score
developed by a third party, or using specific types of credit history in calculating
insurance scores and property/casualty premiums.
HB 2183 Status: Failed to Pass In House Committee Feb. 18
Prohibits use of credit history to determine property/casualty insurance rates.
Arkansas:
HB 2358 Status: In House Committee on Insurance and Commerce
Prohibits the use of consumer credit information to determine premiums, whether to
provide coverage, to cancel or nonrenew, or to determine what coverage will be
provided for personal passenger automobile, boat, personal watercraft, snowmobile and
recreational vehicle insurance. Restricts use of credit by other personal lines insurers.
States that these provisions will not apply to commercial insurance.
SB 312 Status: In Senate Committee on Insurance and Commerce
Requires insurers to provide information regarding their rates and rating criteria to the
Arkansas Insurance Commissioner by July 1, 2003. Specifies that each insurer must
provide in its filing the current rates and the estimated rates for the six-month period
following the effective date of this law, based upon information reasonably known to the
insurer at the time of the filing. Allows the Commissioner to request additional
information, including information related to credit scoring formulas and methodologies
used by the insurer.
Insurance Scoring Legislation
Mar. 26, 2003
Page 2
SB 846 Status: Passed Senate Mar. 24
Prohibits the use of consumer credit information to determine premiums, whether to
provide coverage, to cancel or nonrenew, or to determine what coverage will be
provided for personal passenger automobile, boat, personal watercraft, snowmobile and
recreational vehicle insurance. Restricts use of credit by other personal lines insurers.
States that these provisions will not apply to commercial insurance.
California:
AB 227 Status: In Assembly Committee on Insurance, Banking and Finance
Prohibits an insurer from using credit ratings, credit reports, credit scoring models, or
credit information to underwrite, classify or rate certain auto and property insurance
policies. The bill also would prohibit an insurer from refusing to issue and from
nonrenewing or canceling those policies, based upon credit grounds.
Colorado:
HB 1055 Status: Defeated in House Business Affairs and Labor Committee Jan. 23
Makes the use of credit scores for the purpose of issuing insurance an unfair and
deceptive practice. Prohibits a consumer reporting agency from issuing a consumer
report to any person or entity if the agency believes the information will be used for the
purpose of underwriting or rating insurance.
HB 1273 Status: Passed House Feb. 21 – Passed Senate Mar. 10 – Sent to Gov.
Requires a consumer reporting agency to disclose to a consumer, upon request, the
following when used to underwrite auto insurance: the credit score, the range of possible
scores, key factors that adversely affect the score, the date the score was created, and
the name of the entity providing the score.
Connecticut:
HB 5490 Status: In House Committee on Insurance and Real Estate.
Prohibits insurers from using credit history as a determining factor when deciding
whether to insure an individual or as a basis for increasing premiums for individuals with
low credit scores.
Florida:
HB 233 Status: In House Committee on Insurance
Relates to the Credit Information in Personal Insurance Act; Specifies the prohibited
activities for insurers using credit information for certain purposes; requires insurers to
disclose certain credit information acquisition activities under certain circumstances and
to secure the authorization for such activities.
HB 987 Status: In House Committee on Insurance
Specifies that act's purpose is to regulate and limit use of credit reports by insurers for
underwriting and rating purposes; specifies types of insurance to which section applies;
requires Insurance Regulation Office to approve insurer's methodology for using credit
reports and to conduct study of use of credit reports for underwriting and rating
purposes.
Insurance Scoring Legislation
Mar. 26, 2003
Page 3
SB 204 Status: Approved In Senate Committee on Banking and Insurance Mar. 25
Prohibits personal lines motor vehicle insurers and homeowners insurers from using
specified credit information to make adverse underwriting decisions. Also requires
insurers to notify applicants and insureds of the use of credit reports to establish their
eligibility for insurance. Mandates that the Office of Insurance Regulation approve an
insurer's methodology for using credit reports.
Requires than an insurer notify an applicant or insured of the use of a credit report to
establish the person's eligibility for credit or insurance; prohibits the use of specified
credit information to make an adverse underwriting decision; requires that an insured be
given an opportunity to correct or question any errors in a credit report; requires that the
Office of Insurance Regulation approve an insurer's methodology for using credit reports.
Georgia:
HB 215 Status: Passed House Mar. 24
Regulates the use of credit information in insurance underwriting and rating. (Similar to
the NCOIL Model) Prohibits an insurer doing personal insurance business in Georgia
from: using an insurance score calculated using income, gender, race, address, zip
code, ethnic group, religion, marital status, or nationality of the consumer as a factor in
making an underwriting decision; denying, canceling, or nonrenewing a policy solely on
the basis of credit information; basing an insured's renewal rates solely upon credit
information; taking an adverse action against a consumer solely because such
consumer does not have a credit card account; and considering an absence of credit
information or an inability to calculate an insurance score in underwriting or rating.
Specifies acceptable use of credit information.
Illinois:
HB 502 Status: In House Committee on Insurance
Prohibits the use of credit reports in the underwriting and pricing of homeowners
insurance.
HB 1640 Status: Passed House Mar. 19
Creates the Use of Credit Information in Personal Insurance Act. Sets forth the manner
in which credit information may be used in the underwriting and rating of personal
insurance. Applies only to personal insurance. Provides for resolution of disputes over
alleged errors in the credit information used by insurers. Requires insurers to file credit
scoring models with the Department of Insurance.
SB 92 Status: Died in Senate Committee on Insurance
An insurance company authorized to do business in this state may not establish
premium rates that are based, in whole or in part, upon an applicant's or insured's credit
report or credit score. A "credit report" is a collection of data regarding a consumer's
credit history, credit capacity, or credit worthiness that has been assembled or evaluated
by a consumer reporting agency. A "credit score" is a numerical value or a
categorization derived from a statistical tool or modeling system designed to predict
certain credit behaviors.
Insurance Scoring Legislation
Mar. 26, 2003
Page 4
Indiana:
HB 1187 Status: In House Committee on Insurance, Corporations and Small
Business
Creates new section relating to underwriting restrictions. Establishes prohibitions stating
that an insurer may not, based solely on credit information, refuse to issue, refuse to
renew, or cancel a policy of property and casualty insurance. Credit information may be
used in conjunction with other criteria as a basis for a refusal to issue, refusal to renew,
cancellation, or rating of a policy of property and casualty insurance in accordance with
the Fair Credit Reporting Act.
HB 1213 Status: Passed House Feb. 11
Establishes provisions prohibiting an insurer from:
 Using credit information to underwrite or rate risks by implementing the use of an
insurance score that is calculated from income, gender, address, zip code, ethnic group,
religion, marital status, or nationality of the consumer as a factor;
 Denying, canceling, or declining to renew a personal insurance policy solely on the
basis of credit information;
 Basing an insured's renewal rate for a personal insurance policy solely on credit
information; or
 Taking adverse action against a consumer solely because the consumer does not
have a credit card account.
HB 1323 Status: House Committee on Insurance, Corporations and Small
Business
Establishes provisions prohibiting an insurer from:
 Using credit information to underwrite or rate risks by implementing the use of an
insurance score that is calculated from income, gender, address, zip code, ethnic group,
religion, marital status, or nationality of the consumer as a factor;
 Denying, canceling, or declining to renew a personal insurance policy solely on the
basis of credit information; basing an insured's renewal rate for a personal insurance
policy solely on credit information; or
 Taking adverse action against a consumer solely because the consumer does not
have a credit card account.
HB 1406 Status: In House Committee on Insurance, Corporations and Small
Business
Prohibits the utilization of credit information to underwrite or rate risks by using an
insurance score that is calculated using income, gender, address, zip code, ethnic
group, religion, marital status, or nationality of the consumer as a factor, denying,
canceling or nonrenewing a personal insurance policy solely on the basis of credit
information, basing an insured's renewal rate for a personal insurance policy solely on
credit information, taking adverse action against a consumer solely because the
consumer does not have a credit card account, or considering the absence of credit
information or an inability to calculate an insurance score in underwriting or rating a
personal insurance policy.
Insurance Scoring Legislation
Mar. 26, 2003
Page 5
HB 1634 Status: In House Committee on Insurance, Corporations and Small
Business
Prohibits an insurer from using credit information to underwrite, classify, or rate a policy
of property and casualty insurance or from refusing to issue, renew, or cancel a policy of
property and casualty insurance based on credit information. Violations of these
provisions by an insurer is an unfair and deceptive act and practice in the business of
insurance.
SB 178 Status: Passed Senate March 4
(Mirrors a bill that passed out of the Senate last year) Creates new section relating to
underwriting restrictions. Establishes prohibitions stating that an insurer may not, based
solely on credit information, refuse to issue, refuse to renew, or cancel a policy of
property and casualty insurance. Credit information may be used in conjunction with
other criteria as a basis for a refusal to issue, refusal to renew, cancellation, or rating of
a policy of property and casualty insurance in accordance with the Fair Credit Reporting
Act.
SB 294 Status: In Senate Committee on Insurance and Financial Institutions
Prohibits insurers from using adverse information on an individual's credit report as a
rating factor for purposes of implementing a motor vehicle insurance rating plan. Insurers
may not utilize these credit reports for deciding whether to issue, or setting the premium
for a motor vehicle insurance policy. Also, insurers may not consider adverse information
on the credit report of an individual who would be covered under the policy as a named
insured or as the spouse or family member of a named insured.
Kansas:
SB 144 Status: Passed Senate Feb. 28
Prohibits a personal lines insurer using credit information in underwriting from using an
insurance score that is calculated using income, address, zip code, race, religion, color,
sex, disability, national origin, ancestry or marital status of the consumer as a factor.
Also prohibits use of credit without consideration of other independent factors. Requires
an insurer using credit information to disclose such use in connection with its application.
Mandates that an insurer taking an adverse action as a result of a credit report must
provide written notification to the consumer clearly and specifically explaining the reason
for such action. Specifies that insurers using insurance scores in underwriting and rating
risks must file their scoring models or other scoring processes with the Insurance
Department.
SB 176 Status: In Senate Committee on Financial Institutions and Insurance
Prohibits a personal lines insurer using credit information in underwriting from using an
insurance score that is calculated based on race, color, creed, religion, national origin,
age, sex, residence, marital status, lawful occupation, including the military service,
physical or mental impairment of the applicant or insured, or any arbitrary, capricious, or
unfairly discriminatory reason. Also prohibits use of credit without consideration of other
independent factors. Requires an insurer using credit information to disclose such use
in connection with its application. Mandates that an insurer taking an adverse action as
a result of a credit report must provide written notification to the consumer clearly and
specifically explaining the reason for such action and providing contact information for
the credit reporting agency providing the credit report. Specifies that insurers using
Insurance Scoring Legislation
Mar. 26, 2003
Page 6
insurance scores in underwriting and rating risks must file their scoring models or other
scoring processes with the Insurance Department.
Kentucky:
HB 94 Status: Passed House Feb. 28 – Died in Senate – Session Adjourned
Deletes provision that prohibits an automobile insurer from declining, refusing to renew,
or canceling a policy solely on the basis of the lack of a credit history of the applicant or
insured; provides that if there is an absence of a credit history of the applicant or
insured, the automobile insurer shall exclude the use of credit history as a factor in a
decision to decline, refuse to renew, or cancel a policy.
HB 142 Status: Died In House Committee – Session Adjourned
Amends provisions and prohibits insurers from rating property/casualty insurance
contracts covering personal risks based, in whole or in part, on the credit history of an
applicant or insured including provisions or removal of a discount or assigning the
insured or applicant to a rating tier. Written notice of a premium for a property and
casualty insurance contract covering personal risks must specify reasons for any
premium increase.
SB 12 Status: Died In Senate – Session Adjourned
Enacts new provisions prohibiting insurers from basing any rates, in whole or in part,
upon the use of an insurance risk score unless the method for calculating the insurance
risk score is filed with the Insurance Commissioner. The Commissioner must determine
if the insurance risk score has a substantial relationship to the risk of loss.
Louisiana:
HB 53 Status: In House Committee on Insurance
Declares the use of credit reports or credit scores by motor vehicle or homeowners
insurers to be unfair trade practice if such reports are used to deny, limit, or cancel a
policy.
HB 58 Status: In House Committee on Insurance
Provides that the use of credit reports or credit scores in terminating, modifying, denying,
or limiting motor vehicle insurance coverage constitutes unfair discrimination.
HB 118 Status: In House Committee on Insurance
Prohibits a homeowners' insurer or auto insurer from terminating or modifying coverage,
refusing to insure, refusing to renew, cancelling, or limiting the amount of vehicle or
homeowner's insurance coverage based on the insurer's use of any credit report or
credit scoring.
SB 56 Status: In Senate Committee on Insurance
Prohibits auto insurers from obtaining or using credit information regarding an insured or
an applicant for an automobile insurance policy. Disallows the use of credit information
to refuse to issue or renew a policy, increase premiums, or to cancel an automobile
policy. Declares a violation of this law to be an unfair trade practice. Specifies that the
Commissioner of Insurance must promulgate rules and regulations which, at a minimum,
provide for the suspension of an insurer's license for a violation.
Insurance Scoring Legislation
Mar. 26, 2003
Page 7
Maine:
HB 362 Status: In Joint Committee on Insurance and Financial Services
Provides specific criteria for insurers using credit information to underwrite risks in motor
vehicle and fire insurance policies. Prohibits insurers from denying, canceling, or
nonrenewing policies based solely on credit information; basing an insured's rates solely
on credit information; or considering the absence of credit information in making
underwriting decisions. Requires insurers using credit information to obtain updates of
such information. Requires insurers to notify consumers of any adverse underwriting
decisions made based on credit.
Maryland:
SB 174 Status: Withdrawn from Consideration Mar. 12
Requires an insurer to obtain specified approval to use credit history to rate a risk based
on specified credit history; prohibits an insurer from using a specified factor on a
specified credit history; requires a specified insurer to advise a specified applicant or
insured about a specified credit history; prohibits an insurer from using specified factors
in rating a specified policy.
SB 444 Status: Failed In Senate Finance Committee Mar. 14
Repeals the actuarially justified surcharge on the rate applied to new policies of private
passenger motor vehicle insurance for specified applicants; repealing a specified
termination provision relating to specified private passenger motor vehicle insurance;
etc.
Michigan:
HB 4268 Status: In House Committee on Insurance
Modifies the Insurance Code and creates an additional provision prohibiting insurer from
establishing or maintaining a premium discount plan based in whole or in part upon an
applicant's or insured's credit history or lack of credit history.
Minnesota
HB 76 Status: In House Committee on Commerce Jobs and Economic Policy
Removes previous provisions establishing prohibitions on the utilization of credit scores
for writing automobile and homeowner's insurance. Adds provision applying the law to
applications for insurance policies received, and to renewals, cancellations, and
nonrenewals effective received on or after August 1, 2003.
Missouri:
HB 259 Status: In House Committee on Financial Services
Prohibits an insurer from using a credit report or credit score as the sole factor in
underwriting or for any other insurance purposes. Requires an insurer to consider
another noncredit-related insurance factor prior to taking any adverse action based on a
credit report or credit score. Specifies that restriction also applies to insureds and
applicants for whom an insurance credit score cannot be calculated. Requires insurers
to disclose use of credit in insurance contract.
Insurance Scoring Legislation
Mar. 26, 2003
Page 8
Montana:
HB 184 Status: Passed House Feb. 12 – In Senate Committee on Business and
Labor
Regulates the use of credit histories or credit scores by insurers; provides that the use of
credit histories and credit scores applies to personal insurance; provides for notice to
consumers with respect to the use of credit histories or credit scores; provides for
corrections to erroneous credit histories or credit scores; provides for indemnification of
insurance procedures.
HB 332 Status: Tabled In House Committee on Business and Labor Feb. 5, 2003
Prohibits the use of credit.
SB 349 Status: Passed Senate 2/27
(Based on the NCOIL Model) Prohibits the use an insurance score that is calculated
using income, gender, address, zip code, ethnic group, religion, marital status, or
nationality of the consumer as a factor. Also prohibits the use of credit information used
to deny, cancel, or not renew a policy of personal insurance solely on the basis of credit
information without consideration of any other applicable underwriting factor independent
of credit information. Prohibits the utilization of credit information used to base an
insured's renewal rates for personal insurance solely upon credit information.
Nebraska:
LB 487 Status: Approved In Committee on Banking, Commerce and Insurance
Feb. 19, 2003
Adopts the NCOIL Model Act Regarding Use of Credit Information in Personal
Insurance.
LB 693 Status: Died In Committee Feb. 19
Prohibits insurance discrimination based upon credit history.
Nevada:
AB 194 Status: Passed Assembly Mar. 17
Prohibits insurers writing personal lines from requesting submission of consumer reports
from applicants or insureds for use in underwriting or to determine basis of cancellation
or nonrenewal.
New Hampshire:
HB 557 Status: Failed to Pass House Mar. 25
Prohibits insurers from imposing higher rates, or canceling a homeowner's insurance
policy based on the number of claims submitted by the policyholder. Prohibits
submission of mold-based claims under a homeowner's insurance policy. Forbids motor
vehicle insurers from using credit information for underwriting purposes.
New Mexico:
SB 325 Status: Died in House – Session Adjourned
Prohibits insurers writing motor vehicle insurance from charging higher premium or
canceling a policy based on consumer credit reports.
Insurance Scoring Legislation
Mar. 26, 2003
Page 9
New York:
AB 2661 Status: In Assembly Committee on Insurance
Prohibits the use or consideration of a person's credit history in any calculation or
formula for determining homeowners' insurance rates. Provides that no person may be
denied homeowners' insurance based upon credit.
North Dakota:
HB 1260 Status: Passed House Feb. 17 – Passed Senate Mar. 25
(Follows the NCOIL Model Act) An insurer may not use income, gender, address, zip
code, ethnic group, religion, marital status, age, occupation, or nationality of the
consumer as a factor for calculating an insurance score. Also, an insurer may not deny,
cancel, or nonrenew a policy of personal insurance solely on the basis of credit
information.
HB 1290 Status: Died In House Committee Feb. 11
Prohibits an insurer from using credit information as the sole basis for declining
application for, declining renewal of, or terminating property and casualty insurance
policies. Also prohibits the use of credit information as a basis on which property and
casualty insurance policy premium rates are increased or decreased if the increases or
decrease exceeds fifteen percent of the policy rate.
Ohio:
SB 48 Status: In Senate Committee on Insurance
Prohibits an insurer's use of a credit history or credit score in fixing a premium rate for, or
the terms and conditions of, an insurance policy, or in determining whether to issue,
continue, or renew an insurance policy.
Oklahoma:
HB 1629 Status: Died House Rules Committee
Prohibits use of credit history in computation of premiums on certain insurance policies;
authorizes Insurance Commissioner to take specified actions for certain violations by
insurers.
HB 1659 Status: Died In House Insurance Committee
Prohibits use of credit history in computation of premiums on certain insurance policies;
authorizes Insurance Commissioner to take specified actions for certain violations by
insurers.
HB 1751 Status: Passed House Feb. 24
Creates the Use of Credit Information in Personal Insurance Act; provides purpose of
act; provides for applicability of act; defines terms; restricts use of credit information in
underwriting; provides for dispute resolution; requires notification of use of credit
information; requires notification if insurer takes adverse action based on credit
information.
SB 539 Status: Passed Senate Mar. 4 – Approved in House Committee on
Insurance Mar. 25
Creates the Use of Credit Information in Personal Insurance Act; States applicability of
act; Prohibits insurer from using credit information in specified circumstances; Provides
Insurance Scoring Legislation
Mar. 26, 2003
Page 10
exceptions; Requires certain actions by insurer upon certain notice; Requires certain
adjustment and refund.
SB 684 Status: Died In Senate Business and Labor Committee
Relates to insurance; prohibits insurers from certain actions based on specified
information; requires annual report of certain data; provides punishment.
Oregon:
SB 260 Status: In Senate Judiciary Committee
Prohibits insurer from using credit history or insurance score of consumer applying for or
renewing personal property or casualty insurance when making underwriting or rating
decision.
SB 280 Status: In Senate Judiciary Committee
Establishes requirements for use of credit history in personal insurance underwriting and
rating. Requires Director of Department of Consumer and Business Services to report to
Seventy-third Legislative Assembly on use of credit history for personal insurance.
SB 314 Status: In Senate Judiciary Committee
Prohibits an insurer from using the credit history or insurance score of a consumer in
determining eligibility for personal insurance coverage.
Pennsylvania:
HB 379 Status: In House Committee on Insurance
Makes it an unfair insurance practice to deny or refuse to issue or renew an insurance
policy because the insured or applicant has an unsatisfactory credit rating.
SB 198: Status: In Senate Committee on Banking and Insurance
Prohibits auto and homeowner insurers from using credit history to deny, cancel, or nonrenew insurance, but allows its use if actuarially justified in combination with other
criteria to adjust premium rates.
SB 323 Status: Senate Committee on Banking and Insurance
Prohibits an insurer from canceling, refusing to write or nonrenewing an auto policy
because of credit history or rating. The bill does permit the requirement of payment in
full in advance prior to issuance or renewal based on credit history.
SB 331 Status: In Senate Committee on Banking and Insurance
Prohibits auto and homeowner insurers from using credit history in whole or in part to
deny, cancel, or non-renew insurance. It expressly permits placement with an affiliated
insurer.
SB 336 Status: In Senate Committee on Banking and Insurance
Prohibits an auto insurer from using credit history in whole or in part to deny, cancel,
non-renew, surcharge or rate insurance.
Insurance Scoring Legislation
Mar. 26, 2003
Page 11
Rhode Island:
HB 5362 Status: In House Committee on Corporations
Prohibits insurers from utilizing specified credit information in any insurance scoring
methodology, or in reviewing such information for the purpose of underwriting or rating
homeowners and automobile policies.
SB 137 Status: In Senate Committee on Regulatory Issues
Prohibits an insurer from utilizing certain credit information as negative factors for the
purpose of underwriting or rating a policy of personal insurance.
South Carolina:
SB 49 Status In Senate Committee on Banking and Insurance
Prohibits an insurance company from considering an individual's credit rating in
determining an individual's insurance rate for any line of insurance.
Tennessee:
HB 22 Status: In House Committee on Commerce
Relates to insurance rates; prohibits insurance company from charging higher premiums
based primarily on individuals credit rating.
HB 284 Status: Withdrawn from House Committee on Commerce
Provides that homeowner insurance rates and premiums are "unfairly discriminatory" if
said rates and premiums are based "in whole or in part" upon the applicant's credit
report information.
HB 711 Status: In House Committee on Commerce
Prohibits insurers from charging higher premiums or cancelling or nonrenewing an
insurance policy or coverage "based primarily" upon an individual's credit rating or credit
history. The phrase "based primarily" means that the weight given by the insurer to an
individual's credit rating or credit history exceeds the weight given by the insurer to all
other criteria considered in making the decision to charge a higher premium.
SB 122 Status: In Senate Committee on Commerce, Labor and Agriculture
Prohibits homeowner's insurance rates and increases from being based in whole or in
part on credit report information such that it is unfairly discriminatory.
SB 638 Status: In Senate Committee on Commerce, Labor and Agriculture
Prohibits insurers from charging higher premiums or cancelling or nonrenewing an
insurance policy or coverage "based primarily" upon an individual's credit rating or credit
history. The phrase "based primarily" means that the weight given by the insurer to an
individual's credit rating or credit history exceeds the weight given by the insurer to all
other criteria considered in making the decision to charge a higher premium.
SB 1616 Status: In Senate Committee on Commerce, Labor and Agriculture
Prohibits insurers from charging higher premiums or cancelling or nonrenewing an
insurance policy or coverage "based primarily" upon an individual's credit rating or credit
history. The phrase "based primarily" means that the weight given by the insurer to an
individual's credit rating or credit history exceeds the weight given by the insurer to all
other criteria considered in making the decision to charge a higher premium.
Insurance Scoring Legislation
Mar. 26, 2003
Page 12
Texas:
HB 45 Status: In House Committee on Insurance
Prohibits property casualty insurers use underwriting guidelines that use a person's
credit history or rating when underwriting personal lines policies; does not apply to use of
credit information solely for use in determining whether to offer an installment payment
plan of premiums to insured.
HB 81 Status: In House Committee on Insurance
Prohibits an insurer from making an underwriting decision on certain personal lines
insurance policies based in whole, or in part on a consumer credit report. Provides that
an insurer may refuse to allow premium payment installments for any person whose
failure to pay premiums for an insurance policy caused a lapse in that policy under
specified conditions. Imposes penalties under the Unfair Trade Practices Act for
violation of these provisions.
HB 115 Status: In House Committee on Insurance
Prohibits all insurers, including reciprocals, farm or county mutuals and Lloyds plan
insurers, from using underwriting guidelines which use credit scoring or reports, whether
in whole or part, to determine eligibility for personal lines insurance; adds violations of
this provision to unfair trade practices act.
HB 259 Status: In House Committee on Insurance
Prohibits insurers writing homeowners, residential fire, farm and ranch, and personal
automobile insurance from using a credit scoring model or method as underwriting
guidelines without first receiving regulatory approval. Commissioner must approve or
disapprove filing within 30 days of receipt of filing, and allows promulgation of
regulations to administer the process. "Complete filing" defined as when the
commissioner receives all information requested. Filings will be classified public
information. Violations will be unfair trade practices violations; authorizes commissioner
to promulgate regulations to implement process.
HB 265 Status: In House Committee on Insurance
Adds new section to insurance code to outline criteria for use of consumer credit reports
when underwriting residential property and personal auto risks, including notice to
applicant of use of credit report or history, treatment of extraordinary events or no credit
history, restrictions on cancellation or nonrenewal, confidentiality of credit report
underwriting criteria filed with the regulator, notice of adverse action and right to correct
reports.
HB 331 Status: In House Committee on Insurance
Prohibits all insurers writing personal auto, homeowners, ranch or farm, or fire and allied
lines from using credit scores in underwriting or rating, or for determining whether to
cancel or nonrenew a policyholder; violations deemed unfair trade practice; exempts use
for determining payment plans.
SB 91 Status: In Senate Committee on Business and Commerce
Prohibits use of credit scoring by insurers writing personal automobile, homeowners,
farm and ranch or farm and ranch owners, or residential fire and allied lines insurance
Insurance Scoring Legislation
Mar. 26, 2003
Page 13
policies. Specifies that an insurer may not refuse to underwrite, cancel, or refuse to
renew a risk based, in whole or in part, on the credit history or credit score of an
applicant for insurance coverage. Provides that insurer may not rate a risk, or require a
particular payment plan based on the credit history or credit score of an applicant.
SB 99 Status: In Senate Committee on Business and Commerce
Prohibits an insurer from using an underwriting guideline or standard that is based in
whole, or in part on the credit report or credit score of the applicant, or any person other
than the named applicant who would be insured under the policy. Specifies that the use
of a credit report or credit score does not apply if insurer's use is solely to determine
whether the insurer will offer an installment plan for the payment of premiums.
SB 130 Status: In Senate Committee on Business and Commerce
Prohibits insurers from using credit scores or reports as the sole basis for underwriting
an applicant, nonrenewing or canceling an insured for personal automobile and
residential homeowners lines; prohibits use of "no history", medical collections, or
disputed credit information when determining a credit score. Also requires insurers
using credit scoring for these lines to file methodology with commissioner.
Utah:
HB 216 Status: Died In House Committee – Session Adjourned
Prohibits the use of credit information for any purposes other than extending credit or
conducting a criminal background check. The act modifies the Insurance Code to
prohibit all uses of credit information in connection with motor vehicle insurance.
Vermont:
HB 186 Status: In House Committee on Commerce
Prohibits an insurer from making an adverse decision on the eligibility, or pricing of
personal risk insurance based on a consumer's credit information unless: the action is
based upon one or more specific credit criteria in a consumer credit report; the insurer
can demonstrate that the consumer's credit criterion used increases the risk of loss to
the insurer under the policy; and the insurer provides the consumer with a reason form
the action. Specifies that an insurer may not use credit information that is more than two
years old to determine initial eligibility for personal insurance.
Virginia:
HB 2753 Status: Died In House Committee – Session Adjourned
Provides specific criteria for insurers using credit information to underwrite risks in motor
vehicle and fire insurance policies. Prohibits insurers from denying, canceling, or
nonrenewing policies based solely on credit information; based an insured's rates solely
on credit information; or considering the absence of credit information in making
underwriting decisions. Requires insurers using credit information to obtain updates of
such information every 36 months, and disclose the use of credit on their applications.
Requires insurers to notify consumers of any adverse underwriting decisions made
based on credit.
Insurance Scoring Legislation
Mar. 26, 2003
Page 14
SB 1284/HB 2535 Status: Passed Senate Feb 4 – Passed House Feb 18 – Signed by
Gov. Mar. 24 – Session Adjourned
Prohibits insurers from nonrenewing homeowners, renters, or motor vehicle insurance
policies based on credit information contained in a consumer report. Specifies that if
credit is used as part of the basis for nonrenewal, then the report must have been
obtained within 120 days of the date of nonrenewal. Also establishes requirements
concerning the use of credit information for underwriting, tier placement, or rating
purposes for new policies and renewals.
West Virginia:
SB 376 Status: Died In Senate Committee – Session Adjourned
Amends law and prohibits the declination of an application for a private passenger policy
by an insurer based on an adverse credit report or an adverse credit score, provided that
an insurance carrier rerating for credit scoring purposes a new or renewal insurance
policy maintains a toll free number for the applicant or insured to use to contact a trained
insurance representative or offers free professional counseling to an applicant or an
insured regarding rating improvement methods.
Wyoming:
SB 81 Status: Passed Senate Feb. 10 – Passed House Feb. 28 – Signed by Gov.
Mar. 3 – Session Adjourned
Authorizes the insurance commissioner to adopt rules necessary to govern the practices
of all licensed insurance entities with respect to the use of credit scoring in the
underwriting of automobile and homeowner policies. The rules will provide that an
individual's credit history or scoring “may not be the sole basis to cancel, deny or
nonrenew an insurance policy.” An insurer may use credit history only in combination
with other valid underwriting factors independent of credit history or score. In addition, an
insurer must provide notice to an individual indicating credit scoring is being used to
underwrite a policy. The insurer must also provide notice indicating when the use of
credit scoring is adverse to the individual.