1.1                          A bill for an act
  1.2             relating to insurance; limiting the use of credit 
  1.3             information; amending Minnesota Statutes 2000, section 
  1.4             72A.20, by adding a subdivision. 
  1.5   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.6      Section 1.  Minnesota Statutes 2000, section 72A.20, is 
  1.7   amended by adding a subdivision to read: 
  1.8      Subd. 36.  [LIMITATIONS ON THE USE OF CREDIT 
  1.9   INFORMATION.] (a) No insurer may reject, cancel, or nonrenew a 
  1.10  policy of motor vehicle insurance as defined under section 
  1.11  65B.01 or a policy of homeowner's insurance as defined under 
  1.12  section 65A.27, for any person in whole or in part on the basis 
  1.13  of credit information, including a credit reporting product 
  1.14  known as a "credit score" or "insurance score," without 
  1.15  consideration of any other applicable underwriting factor. 
  1.16     (b) If credit information, credit scoring, or insurance 
  1.17  scoring is to be used in underwriting, the insurer must disclose 
  1.18  to the consumer that credit information will be obtained and 
  1.19  used as part of the insurance underwriting process. 
  1.20     (c) Insurance inquiries and nonconsumer-initiated inquiries 
  1.21  must not be used as part of the insurance credit scoring or 
  1.22  insurance scoring process. 
  1.23     (d) If a credit score, insurance score, or other credit 
  1.24  information relating to a consumer, with respect to the types of 
  1.25  insurance referred to in paragraph (a), is adversely impacted or 
  2.1   cannot be generated because of the lack of a credit history, the 
  2.2   insurer must exclude the use of credit as a factor in 
  2.3   underwriting. 
  2.4      (e) Insurers must provide reasonable credit exemptions 
  2.5   based upon prior credit histories for persons whose credit 
  2.6   information is unduly influenced by extraordinary life events, 
  2.7   such as catastrophic injury or the death of a spouse. 
  2.8      (f) A credit scoring or insurance scoring methodology must 
  2.9   not be used by an insurer if the credit scoring or insurance 
  2.10  scoring methodology incorporates the gender, race, nationality, 
  2.11  or religion of an insured or applicant. 
  2.12     (g) Insurers that employ a credit scoring or insurance 
  2.13  scoring system in underwriting must have on file with the 
  2.14  commissioner: 
  2.15     (1) the insurer's credit scoring or insurance scoring 
  2.16  methodology; and 
  2.17     (2) information that supports the insurer's use of a credit 
  2.18  score or insurance score. 
  2.19     Information provided by an insurer to the commissioner 
  2.20  under this subdivision is trade secret information under section 
  2.21  13.37. 
  2.22     (h) Insurers described in paragraph (g) shall file the 
  2.23  required information with the commissioner within 120 days of 
  2.24  the effective date of this act, or prior to implementation of a 
  2.25  credit scoring system by the insurer, if that date is later.