Full Text of HB0418 96th General Assembly
HB0418enr 96TH GENERAL ASSEMBLY
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HB0418 Enrolled |
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| AN ACT concerning regulation.
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| Be it enacted by the People of the State of Illinois,
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| represented in the General Assembly:
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| Section 5. The Use of Credit Information in Personal | 5 |
| Insurance Act is amended by changing Section 20 as follows:
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| (215 ILCS 157/20)
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| 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:
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| (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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| (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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| 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. If an insurer | 20 |
| denies, cancels, or does not renew a policy of personal | 21 |
| insurance based on credit information, it must provide the | 22 |
| affected party with a notice as described in Section 35 of | 23 |
| this Act and an opportunity for the affected party to |
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| explain its credit information under the procedures | 2 |
| outlined in Section 22 of this Act.
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| (3) Base an insured's renewal rates for personal | 4 |
| insurance solely upon
credit information, without | 5 |
| consideration of any other applicable factor
independent | 6 |
| of credit information. An insurer shall not be considered | 7 |
| to
have based rates solely on credit information if | 8 |
| coverage is available in a
different tier of the same | 9 |
| insurer.
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| (4) Take an adverse action against a consumer solely | 11 |
| because he or she
does not have a credit card account, | 12 |
| without consideration of any other
applicable factor | 13 |
| independent of credit information.
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| (5) Consider an absence of credit information or an | 15 |
| inability to calculate
an insurance score in underwriting | 16 |
| or rating personal insurance, unless the
insurer does one | 17 |
| of the following:
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| (A) Treats the consumer as otherwise filed with the
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| Department, if the insurer presents information that | 20 |
| such
an absence or inability relates to the risk for | 21 |
| the insurer and submits a
filing certification form | 22 |
| signed by an officer for the insurer certifying that
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| such treatment is actuarially justified.
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| (B) Treats the consumer as if the applicant or | 25 |
| insured had neutral
credit information, as defined by | 26 |
| the insurer.
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| (C) Excludes the use of credit information as a | 2 |
| factor and uses only
other underwriting criteria.
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| (6) Take an adverse action against a consumer based on | 4 |
| credit
information, unless an insurer obtains and uses a | 5 |
| credit report issued or an
insurance score calculated | 6 |
| within 90 days from the date the policy is first
written or | 7 |
| renewal is issued.
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| (7) (Blank). Use credit information unless not later | 9 |
| than every 36 months
following the last time that the | 10 |
| insurer obtained current credit information
for the | 11 |
| insured, the insurer recalculates the insurance score or | 12 |
| obtains an
updated credit report. Regardless of the other | 13 |
| requirements of this Section:
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| (A) At annual renewal, upon the request of a | 15 |
| consumer or the consumer's
agent, the insurer shall | 16 |
| re-underwrite and re-rate the policy based upon a
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| current credit report or insurance score. An insurer | 18 |
| need not recalculate the
insurance score or obtain the | 19 |
| updated credit report of a consumer more
frequently | 20 |
| than once in a 12-month period.
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| (B) The insurer shall have the discretion to obtain | 22 |
| current credit
information upon any renewal before the | 23 |
| expiration of 36 months, if
consistent with its | 24 |
| underwriting guidelines.
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| (C) An insurer is not required to obtain current | 26 |
| credit information for
an insured, despite the |
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| requirements of subitem (A) of item (7) of this Section
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| if one of the following applies:
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| (a) The insurer is treating the consumer as | 4 |
| otherwise filed with
the Department.
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| (b) The insured is in the most | 6 |
| favorably-priced tier of the insurer,
within a | 7 |
| group of affiliated insurers. However, the insurer | 8 |
| shall have the
discretion to order credit | 9 |
| information, if consistent with its underwriting
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| guidelines.
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| (c) Credit was not used for underwriting or | 12 |
| rating the insured when
the policy was initially | 13 |
| written. However, the insurer shall have the
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| discretion to use credit for underwriting or | 15 |
| rating the insured upon renewal,
if consistent | 16 |
| with its underwriting guidelines.
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| (d) The insurer re-evaluates the insured | 18 |
| beginning no later than 36
months after inception | 19 |
| and thereafter based upon other underwriting or | 20 |
| rating
factors, excluding credit information.
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| (8) Use the following as a negative factor in any | 22 |
| insurance scoring
methodology or in reviewing credit | 23 |
| information for the purpose of underwriting
or rating a | 24 |
| policy of personal insurance:
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| (A) Credit inquiries not initiated by the consumer | 26 |
| or inquiries
requested by the consumer for his or her |
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| own credit information.
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| (B) Inquiries relating to insurance coverage, if | 3 |
| so identified on a
consumer's credit report.
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| (C) Collection accounts with a medical industry | 5 |
| code, if so identified
on the consumer's credit report.
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| (D) Multiple lender inquiries, if coded by the | 7 |
| consumer reporting agency
on the consumer's credit | 8 |
| report as being from the home mortgage industry and
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| made within 30 days of one another, unless only one | 10 |
| inquiry is considered.
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| (E) Multiple lender inquiries, if coded by the | 12 |
| consumer reporting agency
on the consumer's credit | 13 |
| report as being from the automobile lending industry
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| and made within 30 days of one another, unless only one | 15 |
| inquiry is considered. | 16 |
| (b) An insurer authorized to do business
in this State that | 17 |
| uses credit information to underwrite or rate risks shall, at | 18 |
| annual renewal upon the request of an insured or an insured's | 19 |
| agent, re-underwrite and re-rate the insured's personal | 20 |
| insurance policy based on a current credit report or insurance | 21 |
| score unless one of the following applies: | 22 |
| (1) The insurer's treatment of the consumer is | 23 |
| otherwise approved by the Department. | 24 |
| (2) The insured is in the most favorably priced tier of | 25 |
| the insurer, within a group of affiliated insurers. | 26 |
| (3) Credit information was not used for underwriting or |
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| rating the insured when the personal insurance policy was | 2 |
| initially written. | 3 |
| (4) The insurer reevaluates the insured at least every | 4 |
| 36 months after a personal insurance policy is issued based | 5 |
| on underwriting or rating factors other than credit | 6 |
| information. | 7 |
| (5) The insurer has recalculated an insurance score or | 8 |
| obtained an updated credit report of a consumer in the | 9 |
| previous 12-month period. | 10 |
| An insurer that uses credit information to underwrite or rate | 11 |
| risks may obtain current credit information upon the renewal of | 12 |
| a personal insurance policy when renewal occurs more frequently | 13 |
| than every 36 months if consistent with the insurer's | 14 |
| underwriting guidelines.
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| (Source: P.A. 93-114, eff. 10-1-03; 93-477, eff. 10-1-03.)
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| Section 10. The Public Utilities Act is amended by adding | 17 |
| Section 8-101.5 as follows: | 18 |
| (220 ILCS 5/8-101.5 new) | 19 |
| Sec. 8-101.5. Use of credit information of prospective and | 20 |
| existing customers. A public utility may not deny, cancel, or | 21 |
| nonrenew utility service solely on
the basis of credit | 22 |
| information of prospective or existing customers. If a public | 23 |
| utility denies, cancels, or does not renew service based on | 24 |
| credit information, it must provide the affected party with an |
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| explanation for the public utility's action and an opportunity | 2 |
| for the affected party to explain its credit information. This | 3 |
| Section does not apply to a telecommunications carrier or any | 4 |
| of its affiliates. | 5 |
| Section 99. Effective date. This Act takes effect upon | 6 |
| becoming law. |
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