§ 27-2-21-16 — Requirements for insurer use of credit information

(a) An insurer that uses credit information
to underwrite or rate risks shall not do the following:
(1) Use an insurance score that is calculated using income,
gender, address, ZIP code, ethnic group, religion, marital status,
or nationality of the consumer as a factor.
(2) Deny, cancel, or decline to renew a personal insurance policy
solely on the basis of credit information.
(3) Base an insured's renewal rate for a personal insurance policy
solely on credit information.
(4) Take an adverse action against a consumer solely because the
consumer does not have a credit card account.
(5) Consider an absence of credit information or an inability to
calculate an insurance score in underwriting or rating a personal
insurance policy, unless the insurer does one (1) of the following:
(A) Presents to the commissioner information that the absence
or inability relates to the risk for the insurer and treats the
consumer as approved by the commissioner.
(B) Treats the consumer as if the consumer had neutral credit
information, as defined by the insurer.
(6) Take an adverse action against a consumer based on credit
information unless the insurer obtains and uses:
(A) a credit report issued; or
(B) an insurance score calculated;
not more than ninety (90) days before the date the personal
insurance policy is first written or the renewal is issued.
(7) Use the following as a negative factor in an insurance scoring
methodology or in reviewing credit information for the purpose
of underwriting or rating a personal insurance policy:
(A) A credit inquiry:
(i) not initiated by the consumer; or
(ii) requested by the consumer for the consumer's own credit
information.
(B) A credit inquiry relating to insurance coverage.
(C) A late payment or a collection account with a medical
industry code on the consumer's credit report.
(D) Multiple lender inquiries:
(i) coded by the consumer reporting agency on the consumer's
credit report as being from the home mortgage industry; and
(ii) made within thirty (30) days of one another.
(E) Multiple lender inquiries:
(i) coded by the consumer reporting agency on the consumer's
credit report as being from the automobile lending industry;
and
(ii) made within thirty (30) days of one another.
(b) An insurer that uses credit information to underwrite or rate risks
shall, at annual renewal upon the request of an insured or an insured's
agent, re-underwrite and re-rate the insured's personal insurance policy
based on a current credit report or insurance score unless one (1) of the
following applies:
(1) The insurer's treatment of the consumer is otherwise approved
by the commissioner.
(2) The insured is in the most favorably priced tier of the insurer,
within a group of affiliated insurers.
(3) Credit information was not used for underwriting or rating the
insured when the personal insurance policy was initially written.
(4) The insurer reevaluates the insured at least every thirty-six
(36) months after a personal insurance policy is issued based on
underwriting or rating factors other than credit information.
(5) The insurer has re-underwritten and re-rated the insured's
personal insurance policy based on a credit report obtained or an
insurance score recalculated less than twelve (12) months before
the date of the request by the insured or the insured's agent.
(c) An insurer that uses credit information to underwrite or rate risks
may obtain current credit information upon the renewal of a personal
insurance policy when renewal occurs more frequently than every
thirty-six (36) months if consistent with the insurer's underwriting
guidelines.

Legislative History

As added by P.L.201-2003, SEC.1. Amended by P.L.84-2009, SEC.1.