§ 27-6-53. Use of credit rating.
(a) An insurer may use insurance scoring for rating and underwriting of homeowners' insurance
only under the following conditions:
(1) The insurer demonstrates the predictive nature of their insurance score to the insurance
division.
(2) An insurer shall, once every two (2) years if requested by an existing customer, obtain
an updated insurance score for the customer. If, after obtaining the insurance score,
the customer has improved the customer's credit rating, the user of the information
shall afford the customer any decrease in rates that are available due to the improved
rating. The user may not increase the rate of an existing customer based solely on
a worsening in the customer's insurance score unless: (i) The worsening is due to
a bankruptcy, tax lien, garnishment, foreclosure, or judgment; or (ii) If a subsequent
insurance score no sooner than six (6) months later confirms the worsening in score.
Should an existing customer's score change as the result of an updated credit report,
the decrease or increase in rates must be done at renewal subject to conditions established
herein.
(3) An insurer shall not decline insurance for a new customer based solely on an insurance
score, or absence of an insurance score; and an insurer shall not cancel, nonrenew,
or increase the rate of an existing customer based solely on a worsening in a customer's
insurance score unless: (i) The worsening is due to a bankruptcy, tax lien, garnishment,
foreclosure, or judgment; or (ii) If a subsequent insurance score no sooner than six
(6) months later confirms the worsening in score. Should an existing customer's score
change as the result of an updated credit report, the decrease or increase in rates
must be done at renewal subject to conditions established herein.
(4) No insurer is obligated to obtain a current credit report or insurance score for an
insured if: the insured is in the most favorably-priced tier of the insurer, within
a group of affiliated insurers; or credit was not used for the insured when the policy
was initially written. However, the insurer shall have the discretion to use credit
for the insured upon renewal, if consistent with its underwriting guidelines. The
user may not increase the rate of an existing customer based solely on a worsening
in the customer's insurance score unless: (i) The worsening is due to a bankruptcy,
tax lien, garnishment, foreclosure, or judgment; or (ii) If a subsequent insurance
score no sooner than six (6) months later confirms the worsening in score. Should
an existing customer's score change as the result of an updated credit report, the
decrease or increase in rates must be done at renewal subject to conditions established
herein.
(5) If a credit bureau determines that disputed information is inaccurate or incorrect
and that information was used in determining an insurance score that resulted in a
denial, cancellation, or nonrenewal of or higher premiums or less favorable policy
terms for a consumer, the insurer shall, within thirty (30) days of receiving notice
of correction, reissue or re-rate the policy by refunding the amount of the overpayment
of premium based on the corrected insurance score retroactive to the shorter of the
last twelve (12) months of coverage or the actual period of coverage. An "insurance
score� as used in this section shall be defined as a number or rating that is derived
from an algorithm, computer application, model, or other process that is based in
whole or in part on credit history.
(b) Agents shall be held harmless by insurers for all acts, efforts, and disclosures in
obtaining an insurance score on the insurer's behalf. The commissioner is authorized
and empowered to establish rules and regulations to carry out the provisions of this
section and to fulfill the goals of this section.
(c) Notwithstanding the above, an insurer authorized to do business in Rhode Island that
uses credit information to underwrite or rate risks, shall not use the following as
a negative factor in any insurance scoring methodology or in reviewing credit information
for the purpose of underwriting or rating a policy of personal insurance:
(1) Credit inquiries not initiated by the consumer or inquiries requested by the consumer
for the consumer's own credit information;
(2) Inquiries relating to insurance coverage, if so identified on a consumer's credit
report;
(3) Collection accounts with a medical industry code, if so identified on the consumer's
credit report;
(4) Multiple lender inquiries, if coded by the consumer reporting agency on the consumer's
credit report as being from the home mortgage industry and made within thirty (30)
days of one another, unless only one inquiry is considered;
(5) Multiple lender inquiries, if coded by the consumer reporting agency on the consumer's
credit report as being from the automobile lending industry and made within thirty
(30) days of one another, unless only one inquiry is considered.
(d) No consumer reporting agency shall provide or sell data or lists that include any
information that in whole or in part was submitted in conjunction with an insurance
inquiry about a consumer's credit information or a request for a credit report or
insurance score. Such information includes, but is not limited to, the expiration
dates of an insurance policy or any other information that may identify time periods
during which a consumer's insurance may expire and the terms and conditions of the
consumer's insurance coverage.
(e) The restrictions provided in subsection (d) of this section do not apply to data or
lists the consumer reporting agency supplies to the insurance [agent/producer] from
whom information was received, the insurer on whose behalf such [agent/producer] acted,
or such insurer's affiliates or holding companies.
(f) Nothing in this section shall be construed to restrict any insurer from being able
to obtain a claims history report or a motor vehicle report.