as introduced - 83rd Legislature (2003 - 2004) Posted on 12/15/2009 12:00am
1.1 A bill for an act 1.2 relating to insurance; prohibiting credit scoring for 1.3 automobile and homeowner's insurance; amending 1.4 Minnesota Statutes 2002, section 72A.20, subdivision 1.5 36. 1.6 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 1.7 Section 1. Minnesota Statutes 2002, section 72A.20, 1.8 subdivision 36, is amended to read: 1.9 Subd. 36. [LIMITATIONSPROHIBITION ON THE USE OF CREDIT 1.10 INFORMATION.] (a) No insurer or group of affiliated insurers may 1.11 reject an application for, or renew, cancel, or nonrenew a 1.12 policy of private passenger motor vehicle insurance as defined 1.13 under section 65B.01 or a policy of homeowner's insurance as 1.14 defined under section 65A.27, for any person in whole or in part 1.15 on the basis of credit information, including a credit reporting 1.16 product known as a "credit score" or "insurance score,."without1.17consideration and inclusion of any other applicable underwriting1.18factor.1.19 (b)IfCredit information, credit scoring, or insurance 1.20 scoringis tomust not be used in underwriting,the insurer must1.21disclose to the consumer that credit information will be1.22obtained and used as part of the insurance underwriting1.23processincluding the determination of premium rates. 1.24(c) Insurance inquiries and non-consumer-initiated1.25inquiries must not be used as part of the credit scoring or2.1insurance scoring process.2.2(d) If a credit score, insurance score, or other credit2.3information relating to a consumer, with respect to the types of2.4insurance referred to in paragraph (a), is adversely impacted or2.5cannot be generated because of the absence of a credit history,2.6the insurer must exclude the use of credit as a factor in the2.7decision to reject, cancel, or nonrenew.2.8(e) Insurers must upon request of the applicant or2.9policyholder provide reasonable underwriting exceptions based2.10upon prior credit histories for persons whose credit information2.11is unduly influenced by expenses related to a catastrophic2.12injury or illness, temporary loss of employment, or the death of2.13an immediate family member. The insurer may require reasonable2.14documentation of these events prior to granting an exception.2.15(f) A credit scoring or insurance scoring methodology must2.16not be used by an insurer if the credit scoring or insurance2.17scoring methodology incorporates the gender, race, nationality,2.18or religion of an insured or applicant.2.19(g) Insurers that employ a credit scoring or insurance2.20scoring system in underwriting of coverage described in2.21paragraph (a) must have on file with the commissioner:2.22(1) the insurer's credit scoring or insurance scoring2.23methodology; and2.24(2) information that supports the insurer's use of a credit2.25score or insurance score as an underwriting criterion.2.26(h) Insurers described in paragraph (g) shall file the2.27required information with the commissioner within 120 days of2.28August 1, 2002, or prior to implementation of a credit scoring2.29or insurance scoring system by the insurer, if that date is2.30later.2.31(i) Information provided by, or on behalf of, an insurer to2.32the commissioner under this subdivision is trade secret2.33information under section 13.37.2.34 Sec. 2. [EFFECTIVE DATE; APPLICATION.] 2.35 Section 1 is effective August 1, 2003, and applies to 2.36 applications for policies received, and to renewals, 3.1 cancellations, and nonrenewals effective, on or after that date.