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1 | AN ACT concerning insurance.
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2 | Be it enacted by the People of the State of Illinois,
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3 | represented in the General Assembly:
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4 | Section 5. The Use of Credit Information in Personal | |||||||||||||||||||
5 | Insurance Act is amended by changing Section 20 as follows:
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6 | (215 ILCS 157/20)
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7 | Sec. 20. Use of credit information. An insurer authorized | |||||||||||||||||||
8 | to do business
in this State that uses credit information to | |||||||||||||||||||
9 | underwrite or rate risks shall
not:
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10 | (1) Use an insurance score that is calculated using | |||||||||||||||||||
11 | income, gender,
address, ethnic group, religion, marital | |||||||||||||||||||
12 | status, or nationality of the consumer
as a factor.
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13 | (2) Deny, cancel, or nonrenew a policy of personal | |||||||||||||||||||
14 | insurance solely on
the basis of credit information, | |||||||||||||||||||
15 | without consideration of any other applicable
underwriting | |||||||||||||||||||
16 | factor independent of credit information and not expressly
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17 | prohibited by item (1). An insurer shall not be considered | |||||||||||||||||||
18 | to have denied,
cancelled, or nonrenewed a policy if | |||||||||||||||||||
19 | coverage is available through an
affiliate.
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20 | (3) Base an insured's renewal rates for personal | |||||||||||||||||||
21 | insurance solely upon
credit information, without | |||||||||||||||||||
22 | consideration of any other applicable factor
independent | |||||||||||||||||||
23 | of credit information. An insurer shall not be considered | |||||||||||||||||||
24 | to
have based rates solely on credit information if | |||||||||||||||||||
25 | coverage is available in a
different tier of the same | |||||||||||||||||||
26 | insurer.
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27 | (4) Take an adverse action against a consumer solely | |||||||||||||||||||
28 | because he or she
does not have a credit card account, | |||||||||||||||||||
29 | without consideration of any other
applicable factor | |||||||||||||||||||
30 | independent of credit information.
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31 | (5) Consider an absence of credit information or an | |||||||||||||||||||
32 | inability to calculate
an insurance score in underwriting |
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1 | or rating personal insurance, unless the
insurer does one | ||||||
2 | of the following:
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3 | (A) Treats the consumer as otherwise filed with the
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4 | Department, if the insurer presents information that | ||||||
5 | such
an absence or inability relates to the risk for | ||||||
6 | the insurer and submits a
filing certification form | ||||||
7 | signed by an officer for the insurer certifying that
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8 | such treatment is actuarially justified.
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9 | (B) Treats the consumer as if the applicant or | ||||||
10 | insured had neutral
credit information, as defined by | ||||||
11 | the insurer.
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12 | (C) Excludes the use of credit information as a | ||||||
13 | factor and uses only
other underwriting criteria.
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14 | (6) Take an adverse action against a consumer based on | ||||||
15 | credit
information, unless an insurer obtains and uses a | ||||||
16 | credit report issued or an
insurance score calculated | ||||||
17 | within 90 days from the date the policy is first
written or | ||||||
18 | renewal is issued.
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19 | (7) Use credit information unless not later than every | ||||||
20 | 36 months
following the last time that the insurer obtained | ||||||
21 | current credit information
for the insured, the insurer | ||||||
22 | recalculates the insurance score or obtains an
updated | ||||||
23 | credit report. Regardless of the other requirements of this | ||||||
24 | Section:
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25 | (A) At annual renewal, upon the request of a | ||||||
26 | consumer or the consumer's
agent, the insurer shall | ||||||
27 | re-underwrite and re-rate the policy based upon a
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28 | current credit report or insurance score. An insurer | ||||||
29 | need not recalculate the
insurance score or obtain the | ||||||
30 | updated credit report of a consumer more
frequently | ||||||
31 | than once in a 12-month period.
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32 | (B) The insurer shall have the discretion to obtain | ||||||
33 | current credit
information upon any renewal before the | ||||||
34 | expiration of 36 months, if
consistent with its | ||||||
35 | underwriting guidelines.
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36 | (C) An insurer is not required to obtain current |
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1 | credit information for
an insured, despite the | ||||||
2 | requirements of subitem (A) of item (7) of this Section
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3 | if one of the following applies:
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4 | (a) The insurer is treating the consumer as | ||||||
5 | otherwise filed with
the Department.
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6 | (b) The insured is in the most | ||||||
7 | favorably-priced tier of the insurer,
within a | ||||||
8 | group of affiliated insurers. However, the insurer | ||||||
9 | shall have the
discretion to order credit | ||||||
10 | information, if consistent with its underwriting
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11 | guidelines.
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12 | (c) Credit was not used for underwriting or | ||||||
13 | rating the insured when
the policy was initially | ||||||
14 | written. However, the insurer shall have the
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15 | discretion to use credit for underwriting or | ||||||
16 | rating the insured upon renewal,
if consistent | ||||||
17 | with its underwriting guidelines.
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18 | (d) The insurer re-evaluates the insured | ||||||
19 | beginning no later than 36
months after inception | ||||||
20 | and thereafter based upon other underwriting or | ||||||
21 | rating
factors, excluding credit information.
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22 | (8) Use the following as a negative factor in any | ||||||
23 | insurance scoring
methodology or in reviewing credit | ||||||
24 | information for the purpose of underwriting
or rating a | ||||||
25 | policy of personal insurance:
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26 | (A) Credit inquiries not initiated by the consumer | ||||||
27 | or inquiries
requested by the consumer for his or her | ||||||
28 | own credit information.
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29 | (B) Inquiries relating to insurance coverage, if | ||||||
30 | so identified on a
consumer's credit report.
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31 | (C) Collection accounts with a medical industry | ||||||
32 | code, if so identified
on the consumer's credit report.
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33 | (D) Multiple lender inquiries, if coded by the | ||||||
34 | consumer reporting agency
on the consumer's credit | ||||||
35 | report as being from the home mortgage industry and
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36 | made within 30 days of one another, unless only one |
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1 | inquiry is considered.
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2 | (E) Multiple lender inquiries, if coded by the | ||||||
3 | consumer reporting agency
on the consumer's credit | ||||||
4 | report as being from the automobile lending industry
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5 | and made within 30 days of one another, unless only one | ||||||
6 | inquiry is considered. | ||||||
7 | (9) Use the credit information or credit report of a | ||||||
8 | consumer in any manner when issuing a "policy of automobile | ||||||
9 | insurance" as defined in paragraph (a) of Section 143.13 of | ||||||
10 | the Illinois Insurance Code.
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11 | (Source: P.A. 93-114, eff. 10-1-03; 93-477, eff. 10-1-03.)
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