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Minnesota Legislature

Office of the Revisor of Statutes

Key: (1) language to be deleted (2) new language

                            CHAPTER 357-S.F.No. 2363 
                  An act relating to insurance; limiting the use of 
                  credit information; regulating trade practices; 
                  amending Minnesota Statutes 2000, section 72A.20, by 
                  adding a subdivision; repealing 2002 H.F. 2988, 
                  sections 30, 34, if enacted. 
        BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
           Section 1.  Minnesota Statutes 2000, section 72A.20, is 
        amended by adding a subdivision 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 nonconsumer-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 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. 
           (f) 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. 
           (g) 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. 
           (h) Insurers described in paragraph (g) shall file the 
        required information with the commissioner within 120 days of 
        the effective date of this section, or prior to implementation 
        of a credit scoring or insurance scoring system by the insurer, 
        if that date is later. 
           (i) Information provided by, or on behalf of, an insurer to 
        the commissioner under this subdivision is trade secret 
        information under section 13.37. 
           Sec. 2.  [REPEALER.] 
           Sections 30 and 34 of 2002 H.F. 2988, if enacted, are 
        repealed effective retroactive to their date of enactment, 
        notwithstanding Minnesota Statutes, section 645.26, subdivision 
        3. 
           Presented to the governor April 30, 2002 
           Signed by the governor May 1, 2002, 2:37 p.m.