HF 1362

as introduced - 84th Legislature (2005 - 2006) Posted on 12/15/2009 12:00am

A bill for an act
relating to insurance; prohibiting credit scoring for
automobile and homeowner's insurance; amending
Minnesota Statutes 2004, section 72A.20, subdivision
36.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

Section 1.

Minnesota Statutes 2004, section 72A.20,
subdivision 36, is amended to read:

Subd. 36.

deleted text begin limitations deleted text end new text begin prohibition new text end on the use of credit
information.

(a) No insurer or group of affiliated insurers may
reject new text begin an application for new text end , new text begin or renew, new text end cancel, or nonrenew a
policy of private passenger motor vehicle insurance as defined
under section 65B.01 or a policy of homeowner's insurance as
defined under section 65A.27, for any person in whole or in part
on the basis of credit information, including a credit reporting
product known as a "credit score" or "insurance score deleted text begin , deleted text end new text begin . new text end " deleted text begin without
consideration and inclusion of any other applicable underwriting
factor.
deleted text end

(b) deleted text begin If deleted text end Credit information, credit scoring, or insurance
scoring deleted text begin is to deleted text end new text begin must not new text end be used in underwriting, deleted text begin the insurer must
disclose to the consumer that credit information will be
obtained and used as part of the insurance underwriting
process deleted text end new text begin including the determination of premium rates new text end .

deleted text begin (c) Insurance inquiries and non-consumer-initiated
inquiries must not be used as part of the credit scoring or
insurance scoring process.
deleted text end

deleted text begin (d) If a credit score, insurance score, or other credit
information relating to a consumer, with respect to the types of
insurance referred to in paragraph (a), is adversely impacted or
cannot be generated because of the absence of a credit history,
the insurer must exclude the use of credit as a factor in the
decision to reject, cancel, or nonrenew.
deleted text end

deleted text begin (e) Insurers must upon request of the applicant or
policyholder provide reasonable underwriting exceptions based
upon prior credit histories for persons whose credit information
is unduly influenced by expenses related to a catastrophic
injury or illness, temporary loss of employment, or the death of
an immediate family member. The insurer may require reasonable
documentation of these events prior to granting an exception.
deleted text end

deleted text begin (f) A credit scoring or insurance scoring methodology must
not be used by an insurer if the credit scoring or insurance
scoring methodology incorporates the gender, race, nationality,
or religion of an insured or applicant.
deleted text end

deleted text begin (g) Insurers that employ a credit scoring or insurance
scoring system in underwriting of coverage described in
paragraph (a) must have on file with the commissioner:
deleted text end

deleted text begin (1) the insurer's credit scoring or insurance scoring
methodology; and
deleted text end

deleted text begin (2) information that supports the insurer's use of a credit
score or insurance score as an underwriting criterion.
deleted text end

deleted text begin (h) Insurers described in paragraph (g) shall file the
required information with the commissioner within 120 days of
August 1, 2002, or prior to implementation of a credit scoring
or insurance scoring system by the insurer, if that date is
later.
deleted text end

deleted text begin (i) Information provided by, or on behalf of, an insurer to
the commissioner under this subdivision is trade secret
information under section 13.37.
deleted text end

Sec. 2. new text begin EFFECTIVE DATE; APPLICATION.
new text end

new text begin Section 1 is effective August 1, 2005, and applies to
applications for policies received, and to renewals,
cancellations, and nonrenewals effective, on or after that date.
new text end