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HF 2279

as introduced - 87th Legislature (2011 - 2012) Posted on 02/15/2012 01:57pm

KEY: stricken = removed, old language. underscored = added, new language.


Version List Authors and Status

1.1A bill for an act
1.2relating to insurance; modifying the limitations on the use of credit information;
1.3amending Minnesota Statutes 2010, section 72A.20, subdivision 36.

1.5    Section 1. Minnesota Statutes 2010, section 72A.20, subdivision 36, is amended to
1.7    Subd. 36. Limitations on the use of credit information. (a) No insurer or group of
1.8affiliated insurers may reject, cancel, or nonrenew, limit coverage under, or determine the
1.9premium rate for a policy of private passenger motor vehicle insurance as defined under
1.10section 65B.01 or a policy of homeowner's insurance as defined under section 65A.27,
1.11for any person in whole or in part on the basis of credit information, including a credit
1.12reporting product known as a "credit score" or "insurance score," without consideration
1.13and inclusion of any other applicable underwriting factor.
1.14(b) If credit information, credit scoring, or insurance scoring is to be used in
1.15underwriting, the insurer must disclose to the consumer that credit information will be
1.16obtained and used as part of the insurance underwriting process.
1.17(c) Insurance inquiries and non-consumer-initiated inquiries must not be used as part
1.18of the credit scoring or insurance scoring process.
1.19(d) If a credit score, insurance score, or other credit information relating to a
1.20consumer, with respect to the types of insurance referred to in paragraph (a), is adversely
1.21impacted or cannot be generated because of the absence of a credit history, the insurer
1.22must exclude the use of credit as a factor in the decision to reject, cancel, or nonrenew,
1.23limit coverage, or determine the premium rate.
2.1(e) Insurers must upon the request of a policyholder reevaluate the policyholder's
2.2score. Any change in premium resulting from the reevaluation must be effective upon
2.3the renewal of the policy. An insurer is not required to reevaluate a policyholder's score
2.4pursuant to this paragraph more than twice in any given calendar year.
2.5(f) Insurers must upon request of the applicant or policyholder provide reasonable
2.6underwriting exceptions based upon prior credit histories for persons whose credit
2.7information is unduly influenced by expenses related to a catastrophic injury or illness,
2.8temporary loss of employment, or the death of an immediate family member. The insurer
2.9may require reasonable documentation of these events prior to granting an exception.
2.10(g) A credit scoring or insurance scoring methodology must not be used by an
2.11insurer if the credit scoring or insurance scoring methodology incorporates the gender,
2.12race, nationality, or religion of an insured or applicant.
2.13(h) Insurers that employ a credit scoring or insurance scoring system in underwriting
2.14of coverage described in paragraph (a) must have on file with the commissioner:
2.15(1) the insurer's credit scoring or insurance scoring methodology; and
2.16(2) information that supports the insurer's use of a credit score or insurance score as
2.17an underwriting criterion.
2.18(i) Insurers described in paragraph (h) shall file the required information with the
2.19commissioner within 120 days of August 1, 2002, or prior to implementation of a credit
2.20scoring or insurance scoring system by the insurer, if that date is later.
2.21(j) Information provided by, or on behalf of, an insurer to the commissioner under
2.22this subdivision is trade secret information under section 13.37.
2.23EFFECTIVE DATE.This section is effective August 1, 2012, and applies to
2.24policies issued, renewed, or continued as defined in Minnesota Statutes, section 60A.02,
2.25subdivision 2a, on or after that date.

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