SF 3513

as introduced - 85th Legislature (2007 - 2008) Posted on 12/15/2009 12:00am

A bill for an act
relating to insurance; regulating use of credit scoring in cases of death of a spouse
or divorce; amending Minnesota Statutes 2006, section 72A.20, subdivision 36.

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

Section 1.

Minnesota Statutes 2006, section 72A.20, subdivision 36, is amended to
read:

Subd. 36.

Limitations on the 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 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, 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 new text begin other than
a spouse new text end . 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 (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.

(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 (k) Notwithstanding paragraph (a), no insurer or group of affiliated insurers may
reject, cancel, nonrenew, or increase rates for 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, due to an effect on a policyholder's credit score caused by the loss
of benefit of a spouse's credit information following a divorce or death of the spouse.
new text end