Sen. William R. Haine

Filed: 4/30/2009

 

 


 

 


 
09600HB0418sam001 LRB096 07541 MJR 25580 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.
8     (a) An insurer authorized to do business in this State that
9 uses credit information to 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 a notice as described in Section 35 of
7     this Act and an opportunity for the affected party to
8     explain its credit information under the procedures
9     outlined in Section 22 of this Act.
10         (3) Base an insured's renewal rates for personal
11     insurance solely upon credit information, without
12     consideration of any other applicable factor independent
13     of credit information. An insurer shall not be considered
14     to have based rates solely on credit information if
15     coverage is available in a different tier of the same
16     insurer.
17         (4) Take an adverse action against a consumer solely
18     because he or she does not have a credit card account,
19     without consideration of any other applicable factor
20     independent of credit information.
21         (5) Consider an absence of credit information or an
22     inability to calculate an insurance score in underwriting
23     or rating personal insurance, unless the insurer does one
24     of the following:
25             (A) Treats the consumer as otherwise filed with the
26         Department, if the insurer presents information that

 

 

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

 

 

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

 

 

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1             rating factors, excluding credit information.
2         (8) Use the following as a negative factor in any
3     insurance scoring methodology or in reviewing credit
4     information for the purpose of underwriting or rating a
5     policy of personal insurance:
6             (A) Credit inquiries not initiated by the consumer
7         or inquiries requested by the consumer for his or her
8         own credit information.
9             (B) Inquiries relating to insurance coverage, if
10         so identified on a consumer's credit report.
11             (C) Collection accounts with a medical industry
12         code, if so identified on the consumer's credit report.
13             (D) Multiple lender inquiries, if coded by the
14         consumer reporting agency on the consumer's credit
15         report as being from the home mortgage industry and
16         made within 30 days of one another, unless only one
17         inquiry is considered.
18             (E) Multiple lender inquiries, if coded by the
19         consumer reporting agency on the consumer's credit
20         report as being from the automobile lending industry
21         and made within 30 days of one another, unless only one
22         inquiry is considered.
23     (b) An insurer authorized to do business in this State that
24 uses credit information to underwrite or rate risks shall, at
25 annual renewal upon the request of an insured or an insured's
26 agent, re-underwrite and re-rate the insured's personal

 

 

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1 insurance policy based on a current credit report or insurance
2 score unless one of the following applies:
3         (1) The insurer's treatment of the consumer is
4     otherwise approved by the Department.
5         (2) The insured is in the most favorably priced tier of
6     the insurer, within a group of affiliated insurers.
7         (3) Credit information was not used for underwriting or
8     rating the insured when the personal insurance policy was
9     initially written.
10         (4) The insurer reevaluates the insured at least every
11     36 months after a personal insurance policy is issued based
12     on underwriting or rating factors other than credit
13     information.
14         (5) The insurer has recalculated an insurance score or
15     obtained an updated credit report of a consumer in the
16     previous 12-month period.
17 An insurer that uses credit information to underwrite or rate
18 risks may obtain current credit information upon the renewal of
19 a personal insurance policy when renewal occurs more frequently
20 than every 36 months if consistent with the insurer's
21 underwriting guidelines.
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. This
10 Section does not apply to a telecommunications carrier or any
11 of its affiliates.
 
12     Section 99. Effective date. This Act takes effect upon
13 becoming law.".