State of Illinois
2005 and 2006


Introduced 1/18/2005, by Rep. John J. Millner


215 ILCS 157/20

    Amends the Use of Credit Information in Personal Insurance Act. Prohibits insurers from using the credit information or the credit report of a consumer when issuing a policy of automobile insurance.

LRB094 05163 LJB 35204 b





HB0265 LRB094 05163 LJB 35204 b

1     AN ACT concerning insurance.
2     Be it enacted by the People of the State of Illinois,
3 represented in the General Assembly:
4     Section 5. The Use of Credit Information in Personal
5 Insurance Act is amended by changing Section 20 as follows:
6     (215 ILCS 157/20)
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:
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.
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
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.
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.
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.
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:
3             (A) Treats the consumer as otherwise filed with the
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
8         such treatment is actuarially justified.
9             (B) Treats the consumer as if the applicant or
10         insured had neutral credit information, as defined by
11         the insurer.
12             (C) Excludes the use of credit information as a
13         factor and uses only other underwriting criteria.
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.
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:
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
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.
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.
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
3         if one of the following applies:
4                 (a) The insurer is treating the consumer as
5             otherwise filed with the Department.
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
11             guidelines.
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
15             discretion to use credit for underwriting or
16             rating the insured upon renewal, if consistent
17             with its underwriting guidelines.
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.
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:
26             (A) Credit inquiries not initiated by the consumer
27         or inquiries requested by the consumer for his or her
28         own credit information.
29             (B) Inquiries relating to insurance coverage, if
30         so identified on a consumer's credit report.
31             (C) Collection accounts with a medical industry
32         code, if so identified on the consumer's credit report.
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
36         made within 30 days of one another, unless only one



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1         inquiry is considered.
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
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.
11 (Source: P.A. 93-114, eff. 10-1-03; 93-477, eff. 10-1-03.)