Executive Committee

Filed: 2/19/2009

 

 


 

 


 
09600HB0418ham001 LRB096 07541 MJR 21028 a

1
AMENDMENT TO HOUSE BILL 418

2     AMENDMENT NO. ______. Amend House Bill 418 by replacing
3 everything after the enacting clause with the following:
 
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

 

 

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1     prohibited by item (1). An insurer shall not be considered
2     to have denied, cancelled, or nonrenewed a policy if
3     coverage is available through an affiliate. If an insurer
4     denies, cancels, or does not renew a policy of personal
5     insurance based on credit information, it must provide the
6     affected party with an explanation for the insurer's action
7     and an opportunity for the affected party to explain its
8     credit information.
9         (3) Base an insured's renewal rates for personal
10     insurance solely upon credit information, without
11     consideration of any other applicable factor independent
12     of credit information. An insurer shall not be considered
13     to have based rates solely on credit information if
14     coverage is available in a different tier of the same
15     insurer.
16         (4) Take an adverse action against a consumer solely
17     because he or she does not have a credit card account,
18     without consideration of any other applicable factor
19     independent of credit information.
20         (5) Consider an absence of credit information or an
21     inability to calculate an insurance score in underwriting
22     or rating personal insurance, unless the insurer does one
23     of the following:
24             (A) Treats the consumer as otherwise filed with the
25         Department, if the insurer presents information that
26         such an absence or inability relates to the risk for

 

 

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1         the insurer and submits a filing certification form
2         signed by an officer for the insurer certifying that
3         such treatment is actuarially justified.
4             (B) Treats the consumer as if the applicant or
5         insured had neutral credit information, as defined by
6         the insurer.
7             (C) Excludes the use of credit information as a
8         factor and uses only other underwriting criteria.
9         (6) Take an adverse action against a consumer based on
10     credit information, unless an insurer obtains and uses a
11     credit report issued or an insurance score calculated
12     within 90 days from the date the policy is first written or
13     renewal is issued.
14         (7) Use credit information unless not later than every
15     36 months following the last time that the insurer obtained
16     current credit information for the insured, the insurer
17     recalculates the insurance score or obtains an updated
18     credit report. Regardless of the other requirements of this
19     Section:
20             (A) At annual renewal, upon the request of a
21         consumer or the consumer's agent, the insurer shall
22         re-underwrite and re-rate the policy based upon a
23         current credit report or insurance score. An insurer
24         need not recalculate the insurance score or obtain the
25         updated credit report of a consumer more frequently
26         than once in a 12-month period.

 

 

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1             (B) The insurer shall have the discretion to obtain
2         current credit information upon any renewal before the
3         expiration of 36 months, if consistent with its
4         underwriting guidelines.
5             (C) An insurer is not required to obtain current
6         credit information for an insured, despite the
7         requirements of subitem (A) of item (7) of this Section
8         if one of the following applies:
9                 (a) The insurer is treating the consumer as
10             otherwise filed with the Department.
11                 (b) The insured is in the most
12             favorably-priced tier of the insurer, within a
13             group of affiliated insurers. However, the insurer
14             shall have the discretion to order credit
15             information, if consistent with its underwriting
16             guidelines.
17                 (c) Credit was not used for underwriting or
18             rating the insured when the policy was initially
19             written. However, the insurer shall have the
20             discretion to use credit for underwriting or
21             rating the insured upon renewal, if consistent
22             with its underwriting guidelines.
23                 (d) The insurer re-evaluates the insured
24             beginning no later than 36 months after inception
25             and thereafter based upon other underwriting or
26             rating factors, excluding credit information.

 

 

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1         (8) Use the following as a negative factor in any
2     insurance scoring methodology or in reviewing credit
3     information for the purpose of underwriting or rating a
4     policy of personal insurance:
5             (A) Credit inquiries not initiated by the consumer
6         or inquiries requested by the consumer for his or her
7         own credit information.
8             (B) Inquiries relating to insurance coverage, if
9         so identified on a consumer's credit report.
10             (C) Collection accounts with a medical industry
11         code, if so identified on the consumer's credit report.
12             (D) Multiple lender inquiries, if coded by the
13         consumer reporting agency on the consumer's credit
14         report as being from the home mortgage industry and
15         made within 30 days of one another, unless only one
16         inquiry is considered.
17             (E) Multiple lender inquiries, if coded by the
18         consumer reporting agency on the consumer's credit
19         report as being from the automobile lending industry
20         and made within 30 days of one another, unless only one
21         inquiry is considered.
22 (Source: P.A. 93-114, eff. 10-1-03; 93-477, eff. 10-1-03.)
 
23     Section 10. The Public Utilities Act is amended by adding
24 Section 8-101.5 as follows:
 

 

 

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1     (220 ILCS 5/8-101.5 new)
2     Sec. 8-101.5. Use of credit information of prospective and
3 existing customers. A public utility may not deny, cancel, or
4 nonrenew utility service solely on the basis of credit
5 information of prospective or existing customers. If a public
6 utility denies, cancels, or does not renew service based on
7 credit information, it must provide the affected party with an
8 explanation for the public utility's action and an opportunity
9 for the affected party to explain its credit information.
 
10     Section 99. Effective date. This Act takes effect upon
11 becoming law.".