HF 3589

as introduced - 92nd Legislature (2021 - 2022) Posted on 02/17/2022 02:19pm

A bill for an act
relating to insurance; requiring certain disclosures related to credit information;
amending Minnesota Statutes 2020, section 72A.20, subdivision 36.

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

Section 1.

Minnesota Statutes 2020, section 72A.20, subdivision 36, is amended to read:

Subd. 36.

Limitations on use of credit information.

(a) No insurer or group of affiliated
insurers may reject, 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," 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 new text begin (1) new text end disclose to the consumer that credit information will be obtained and
used as part of the insurance underwriting process new text begin , and (2) provide a detailed explanation
that indicates how the consumer's rate is affected by the credit information used and what
type of data was analyzed. Details disclosed to consumers concerning credit history data
used for underwriting must include the time periods, specified in months or years, during
which each of the credit data items are included in the underwriting process new text end .

(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, or nonrenew.

(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 13.37.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective August 1, 2022, and applies to
homeowners' and auto insurance policies offered, issued, or renewed on or after that date.
new text end