Summary Use of Credit Information in 2022 Insurance Legislation

Amends the Illinois Insurance Code. Provides that no insurer shall utilize, rate, or underwrite in whole or in part an applicant's or insured's education level, employment, trade, business, occupation or profession, or credit report or credit information to determine: whether to issue, deny, cancel, or nonrenew an automobile insurance policy; whether to renew an automobile insurance policy; the appropriate premium for an automobile insurance policy; the appropriate tier for an automobile insurance policy; or an insurance score for an applicant or insured. Defines terms. Amends the Use of Credit Information in Personal Insurance Act. Removes private passenger automobile insurance policies from the definition of "personal insurance."

Amends the Illinois Insurance Code. Provides that no insurer shall utilize, rate, or underwrite in whole or in part an applicant's or insured's education level, employment, trade, business, occupation or profession, or credit report or credit information to determine: whether to issue, deny, cancel, or nonrenew an automobile insurance policy; whether to renew an automobile insurance policy; the appropriate premium for an automobile insurance policy; the appropriate tier for an automobile insurance policy; or an insurance score for an applicant or insured. Defines terms. Amends the Use of Credit Information in Personal Insurance Act. Removes private passenger automobile insurance policies from the definition of "personal insurance.”

Amends and reenacts R.S. 22:1454(A) and repeals Subpart P of Part IV of Chapter 4 of Title 22 of the Louisiana Revised Statutes of 1950, comprised of R.S. 22:1501 through 1514, relative to insurance rating standards and methods; prohibits rate classification based on an insured's education level, employment, trade, business, occupation, profession, or credit information; repeals provisions regarding the use of credit information; and provides for related matters.

HB 436
Passed House 3/11/22

Requires, with respect to private passenger motor vehicle insurance, an insurer that uses credit information to provide certain exceptions to the insurer’s rates, ratings classifications, company or tier placement, and underwriting rules or guidelines to certain applicants and insureds on request; authorizes an insurer to take certain actions if an applicant or insured submits a request for an exception; provides that an insurer is not out of compliance with any law or rule relating to underwriting, rating, or rate filing as a result of granting an exception; establishes certain notice, reporting, and other requirements related to requests for exceptions; and generally relates to rating policies of private passenger motor vehicle insurance.

Prohibits an insurer, with respect to private passenger motor vehicle insurance, from rating a risk based, in whole or in part, on the credit history of an applicant or insured in any manner; repeals certain provisions of law authorizing an insurer to use the credit history of an applicant or insured to rate a new policy of private passenger motor vehicle insurance subject to certain limitations and requirements; and generally relates to rating policies of private passenger motor vehicle insurance.

Repeals certain miscellaneous changes to coverages and benefits. Repeals the provisions that an insurer shall not use an individual's credit score to establish or maintain rates or rating classifications for automobile insurance.

Requires rates to be based on only certain factors.

Modifies rate discrimination protections.

Requires rates to be based on only certain factors.

Relates to insurance; requires certain disclosures related to credit information.

No regular 2022 legislative session

No regular 2022 legislative session

This bill prohibits automobile insurers from assigning an insured or prospective insured to a rating tier based upon that person’s: (1) educational level; (2) employment, trade, business, occupation or profession; or (3) credit score, or any information derived from an insured’s credit report. The bill also prohibits automobile insurers from inquiring of an insured or applicant for insurance, or of a third-party concerning an insured or applicant, as to these factors.

This bill requires the Department of Banking and Insurance to conduct an investigation of practices of the automobile insurance industry in regard to increases in automobile insurance premiums for drivers who have had motor vehicle driver’s license suspensions for any reason – either driving related or not. Further, the commissioner of the department is to investigate the use of credit ratings and addresses in determining premiums for drivers. In performing its investigation, the department is to determine whether increases are justified for certain offenses not related to driving including credit rating.

This bill prohibits automobile insurers from assigning an insured or prospective insured to a rating tier based upon that person’s: (1) educational level; (2) employment, trade, business, occupation or profession; (3) employment status; (4) homeownership status; (5) marital status; or (6) credit score, or any information derived from an insured’s credit report. This bill also prohibits insurers from taking education, occupation, homeownership status, marital status, or credit score into consideration in determining a consumer’s eligibility for insurance or in calculating a rate for an insured, or in any insurance score used to calculate an insured’s rate.

Prohibits motor vehicle insurers from discrimination on the basis of socioeconomic factors in determining algorithms used to construct actuarial tables, coverage terms, premiums and/or rates.

Requires insurers to display certain underwriting information on the declarations page to their homeowners and dwelling fire personal lines policies.

Directs the superintendent of financial services to promulgate rules and regulations limiting the use of credit scores to determine automobile insurance premiums.

Prohibits automobile insurers from refusing to issue or renew an individual's policy based on such individual's credit history.

Prohibits using a consumer's credit score to determine such consumer's access, price, or premium for any insurance policy or other service such consumer is mandated by the state to purchase.

No regular 2022 legislative session

Enacts the Insurance Consumer Rights Act; defines terms; prohibits discrimination by insurers; prohibits the use of algorithms and predictive models that unfairly discriminate; directs Insurance commissioner to adopt rules; directs process for rule creation; directs use of necessary provisions; permits Insurance commissioner to investigate; clarifies applicability of act; provides for codification; and provides an effective date.

Directs an insurer to consider only specified information in determining rates for motor vehicle liability insurance policy. Prohibits an insurer from considering other specified information in determining eligibility, rates or premiums for motor vehicle liability insurance policy. Permits an insurer, under specified circumstances, to consider an abstract of an individual’s nonemployment driving record when evaluating the individual’s application to obtain or renew motor vehicle liability insurance. Prohibits an insurer from using credit history to determine eligibility, rates or premiums for motor vehicle liability insurance.

The bill prohibits the use of any external consumer data and information sources, as well as any algorithms or predictive models that use external consumer data and information sources, in a way that unfairly discriminates based on race, color, national or ethnic origin, religion, sex, sexual orientation, disability, gender identity, or gender expression, by an insurer in regard to any insurance practice. The act would further direct the director of business regulation, in consultation with the health insurance commissioner, to promulgate rules and regulations to enforce these provisions.

This bill prevents the consideration of an applicant's credit history in determining automobile insurance rates.

No regular 2022 legislative session

Prohibits any policy for motor vehicle insurance that uses any of the following characteristics of a driver as a factor in calculating auto insurance rates or determining eligibility for a policy from being issued in the Commonwealth: education, occupation, employment status, homeownership status, credit score, gender, zip code, census tract, marital status, previous insurer, or previous purchase of insurance.

SB 5623

Prohibits the use of credit history to increase rates or premiums at renewal for any personal insurance policy holder beginning on July 1, 2023. Allows insurers to resume the use of credit history effective immediately.

Requires insurers to provide reasonable exceptions to insurance rates for consumers experiencing extraordinary life circumstances, if contacted in writing.

Establishes a work group, convened by a mediator, to examine the use of credit history in insurance scores. Requires the work group to develop viable policy options for the Legislature's consideration by Dec. 1, 2022. Prohibits the Office of the Insurance Commissioner (OIC) from adopting any rules that would conflict with current law regarding the use of credit history in insurance scores until June 30, 2023. Requires insurers to provide information on the consumer experience with the OIC's emergency rule within three months from the date of the request by the work group.

Adds a new section, designated §33-11-4c, relating to insurance unfair trade practices; prohibits use of a person’s credit history in certain insurance transactions.

Adds a new section, designated §33-11-4c, relating to insurance unfair trade practices; prohibits use of a person's credit history in certain insurance transactions.