1.1                          A bill for an act
  1.2             relating to insurance; limiting the use of credit 
  1.3             information; regulating trade practices; amending 
  1.4             Minnesota Statutes 2000, section 72A.20, by adding a 
  1.5             subdivision; repealing 2002 H.F. 2988, sections 30, 
  1.6             34, if enacted. 
  1.7   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.8      Section 1.  Minnesota Statutes 2000, section 72A.20, is 
  1.9   amended by adding a subdivision to read: 
  1.10     Subd. 36.  [LIMITATIONS ON THE USE OF CREDIT 
  1.11  INFORMATION.] (a) No insurer or group of affiliated insurers may 
  1.12  reject, cancel, or nonrenew a policy of private passenger motor 
  1.13  vehicle insurance as defined under section 65B.01 or a policy of 
  1.14  homeowner's insurance as defined under section 65A.27, for any 
  1.15  person in whole or in part on the basis of credit information, 
  1.16  including a credit reporting product known as a "credit score" 
  1.17  or "insurance score," without consideration and inclusion of any 
  1.18  other applicable underwriting factor. 
  1.19     (b) If credit information, credit scoring, or insurance 
  1.20  scoring is to be used in underwriting, the insurer must disclose 
  1.21  to the consumer that credit information will be obtained and 
  1.22  used as part of the insurance underwriting process. 
  1.23     (c) Insurance inquiries and nonconsumer-initiated inquiries 
  1.24  must not be used as part of the credit scoring or insurance 
  1.25  scoring process. 
  1.26     (d) If a credit score, insurance score, or other credit 
  2.1   information relating to a consumer, with respect to the types of 
  2.2   insurance referred to in paragraph (a), is adversely impacted or 
  2.3   cannot be generated because of the absence of a credit history, 
  2.4   the insurer must exclude the use of credit as a factor in the 
  2.5   decision to reject, cancel, or nonrenew. 
  2.6      (e) Insurers must upon request of the applicant or 
  2.7   policyholder provide reasonable underwriting exceptions based 
  2.8   upon prior credit histories for persons whose credit information 
  2.9   is unduly influenced by expenses related to a catastrophic 
  2.10  injury or illness, temporary loss of employment, or the death of 
  2.11  an immediate family member.  The insurer may require reasonable 
  2.12  documentation of these events prior to granting an exception. 
  2.13     (f) A credit scoring or insurance scoring methodology must 
  2.14  not be used by an insurer if the credit scoring or insurance 
  2.15  scoring methodology incorporates the gender, race, nationality, 
  2.16  or religion of an insured or applicant. 
  2.17     (g) Insurers that employ a credit scoring or insurance 
  2.18  scoring system in underwriting of coverage described in 
  2.19  paragraph (a) must have on file with the commissioner: 
  2.20     (1) the insurer's credit scoring or insurance scoring 
  2.21  methodology; and 
  2.22     (2) information that supports the insurer's use of a credit 
  2.23  score or insurance score as an underwriting criterion. 
  2.24     (h) Insurers described in paragraph (g) shall file the 
  2.25  required information with the commissioner within 120 days of 
  2.26  the effective date of this section, or prior to implementation 
  2.27  of a credit scoring or insurance scoring system by the insurer, 
  2.28  if that date is later. 
  2.29     (i) Information provided by, or on behalf of, an insurer to 
  2.30  the commissioner under this subdivision is trade secret 
  2.31  information under section 13.37. 
  2.32     Sec. 2.  [REPEALER.] 
  2.33     Sections 30 and 34 of 2002 H.F. 2988, if enacted, are 
  2.34  repealed effective retroactive to their date of enactment, 
  2.35  notwithstanding Minnesota Statutes, section 645.26, subdivision 
  2.36  3.