relating to insurance; modifying the limitations on the use of credit information;
amending Minnesota Statutes 2010, section 72A.20, subdivision 36.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
Section 1. Minnesota Statutes 2010, section 72A.20, subdivision 36, is amended to
Subd. 36. Limitations on the use of credit information.
(a) No insurer or group of
affiliated insurers may reject, cancel,
nonrenew, limit coverage under, or determine the
1.9premium rate for
a policy of private passenger motor vehicle insurance as defined under
or a policy of homeowner's insurance as defined under section
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," without consideration
and inclusion of any other applicable underwriting factor.
(b) If credit information, credit scoring, or insurance scoring is to be used in
underwriting, the insurer must disclose to the consumer that credit information will be
obtained and used as part of the insurance underwriting process.
(c) Insurance inquiries and non-consumer-initiated inquiries must not be used as part
of the credit scoring or insurance scoring process.
(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,
1.23limit coverage, or determine the premium rate
(e) Insurers must upon the request of a policyholder reevaluate the policyholder's
score. Any change in premium resulting from the reevaluation must be effective upon
the renewal of the policy. An insurer is not required to reevaluate a policyholder's score
pursuant to this paragraph more than twice in any given calendar year.
(f) 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.
(g) 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.
(h) 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:
(1) the insurer's credit scoring or insurance scoring methodology; and
(2) information that supports the insurer's use of a credit score or insurance score as
an underwriting criterion.
(i) Insurers described in paragraph (h) 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.
(j) Information provided by, or on behalf of, an insurer to the commissioner under
this subdivision is trade secret information under section
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.