SOURCE: IC 27-2-21; (02)IN1384.1.1. -->
SECTION 1.
IC 27-2-21
IS ADDED TO THE INDIANA CODE AS
A NEW CHAPTER TO READ AS FOLLOWS [EFFECTIVE JULY
1, 2002]:
Chapter 21. Credit Information in Property and Casualty
Insurance
Sec. 1. As used in this chapter, "applicant" means an individual
who applies for a policy of property and casualty insurance.
Sec. 2. As used in this chapter, "claim loss" means a claim paid
under a policy of property and casualty insurance, including a
claim for:
(1) bodily injury;
(2) property damage;
(3) medical payments;
(4) collision coverage;
(5) comprehensive coverage;
(6) car rental coverage; or
(7) towing coverage.
Sec. 3. As used in this chapter, "commissioner" refers to the
commissioner of the department.
Sec. 4. As used in this chapter, "credit information" means
credit related information obtained through a review of a credit
history, a credit report, a credit score, or on an application for a
policy of property and casualty insurance.
Sec. 5. As used in this chapter, "credit score" means a number
or rating derived through a credit scoring methodology.
Sec. 6. As used in this chapter, "credit scoring methodology"
means the particular algorithm, computer model, or other method
used by an insurer to reduce to a numerical rating for use in the
insurance underwriting process certain credit history data
contained in an individual's credit report.
Sec. 7. As used in this chapter, "department" refers to the
department of insurance created under
IC 27-1-1-1.
Sec. 8. As used in this chapter, "insured" means an individual
who is entitled to coverage under a policy of property and casualty
insurance.
Sec. 9. As used in this chapter, "insurer" means an insurer that:
(1) is described in
IC 27-1-2-3
(x); and
(2) issues a policy of property and casualty insurance.
Sec. 10. As used in this chapter, "property and casualty
insurance" means one (1) or more of the kinds of insurance
described in Class 2 and Class 3 of
IC 27-1-5-1.
Sec. 11. This chapter applies to an individual policy of property
and casualty insurance.
Sec. 12. (a) An insurer may not, based solely on credit
information, refuse to issue, refuse to renew, or cancel a policy of
property and casualty insurance.
(b) An insurer does not violate subsection (a) if the insurer
offers to provide continuous coverage to an insured under a policy
of property and casualty insurance underwritten:
(1) by an affiliate; or
(2) in a different rating class;
of the insurer.
(c) Notwithstanding subsection (b), an insurer violates
subsection (a) by offering continuous coverage described in
subsection (b) if the insured has:
(1) continuously maintained a policy of property and casualty
insurance issued by the insurer;
(2) had no claim loss on the policy specified in subdivision (1);
and
(3) had no moving traffic violations;
during the three (3) years immediately preceding the date on which
the insurer offers to provide continuous coverage.
Sec. 13. If the credit score of an insured or applicant is adversely
impacted or cannot be generated because the credit history of the
insured or applicant is insufficient, an insurer may:
(1) use additional credit related underwriting criteria that
have been filed with the commissioner;
(2) apply underwriting criteria to the insured or applicant as
if the insured or applicant had a neutral credit history, as
defined in the insurer's underwriting guidelines or rate
making standards; or
(3) exclude the use of credit as a factor in the underwriting
process.
Sec. 14. (a) If credit information:
(1) is used in addition to other criteria as the basis for a
refusal to issue, refusal to renew, or cancellation of a policy of
property and casualty insurance; or
(2) adversely affects the:
(A) rating class under which the insured is covered under;
(B) premium charged for; or
(C) benefits provided under;
a policy of property and casualty insurance;
the insurer shall provide notice of the adverse action according to
the provisions of the federal Fair Credit Reporting Act (15 U.S.C.
1681 et seq.) to the insured or applicant.
(b) An insured or applicant may, not more than ninety (90) days
after the insured or applicant receives the notice required under
subsection (a), request in writing from the insurer an explanation
of the principal factors involved in the refusal to issue, refusal to
renew, or cancellation of the policy of property and casualty
insurance.
(c) An insurer shall, not more than twenty-one (21) business
days after the insurer receives a request under subsection (b),
provide in writing to the insured or applicant the requested
explanation.
(d) This section expires January 1, 2004.
Sec. 15. (a) The commissioner may request from an insurer that
uses a credit score:
(1) information that supports the insurer's use of a credit
score; and
(2) the insurer's credit scoring methodology, including:
(A) formulas;
(B) matrices; and
(C) data and information that:
(i) are collected by the insurer for; and
(ii) support the determination of;
a credit score.
(b) The commissioner may request from an insurer that uses
credit information other than a credit score to provide to the
commissioner information that supports the insurer's use of the
credit information.
(c) An insurer shall make information requested by the
commissioner under this section available for examination by the
department at the office of the insurer.
(d) Information provided by an insurer under this section is
confidential.
Sec. 16. (a) An insurer shall not use credit information as a
pretext for discrimination against an insured or applicant that is
based on the gender, race, nationality, or religion of the insured or
applicant.
(b) A credit scoring methodology may not be used by an insurer
if the credit scoring methodology incorporates the gender, race,
nationality, or religion of an insured or applicant.
Sec. 17. A willful violation of this chapter is an unfair and
deceptive act and practice in the business of insurance under
IC 27-4-1-4.
Sec. 18. An insurance producer licensed under
IC 27-1-15.6
is
not liable in any action arising from the use of a credit score by an
insurer.
Sec. 19. This chapter is not intended to conflict with any
disclosure provision of state law or the federal Truth in Lending
Act (15 U.S.C. 1601 et seq.).
SOURCE: IC 27-2-21-14.1; (02)IN1384.1.2. -->
SECTION 2.
IC 27-2-21-14.1
IS ADDED TO THE INDIANA
CODE AS A NEW SECTION TO READ AS FOLLOWS
[EFFECTIVE JANUARY 2, 2004]: Sec. 14.1. If credit information:
(1) is used in addition to other criteria as the basis for a
refusal to issue, refusal to renew, or cancellation of a policy of
property and casualty insurance; or
(2) adversely affects the:
(A) rating class under which the insured is covered under;
(B) premium charged for; or
(C) benefits provided under;
a policy of property and casualty insurance;
the insurer shall provide notice of the adverse action according to
the provisions of the federal Fair Credit Reporting Act (15 U.S.C.
1681 et seq.) to the insured or applicant.
SECTION 3.
IC 27-2-21-14.2
IS ADDED TO THE INDIANA
CODE AS A NEW SECTION TO READ AS FOLLOWS
[EFFECTIVE JANUARY 2, 2004]: Sec. 14.2. (a) This section applies
to an insured or applicant to whom notice is provided under
section 14.1 of this chapter.
(b) This section supplements the federal Fair Credit Reporting
Act (15 U.S.C. 1681 et seq.).
(c) An insured or applicant may, not more than ninety (90) days
after the insured or applicant receives the notice required under
section 14.1 of this chapter, request in writing from the insurer an
explanation of the principal factors and additional information
involved in the refusal to issue, refusal to renew, or cancellation of
the policy of property and casualty insurance.
(d) An insurer shall, not more than twenty-one (21) business
days after the insurer receives a request under subsection (c),
provide in writing to the insured or applicant the requested
explanation, including:
(1) the method by which the insured's or applicant's credit
score was derived;
(2) the source of the information used to derive the credit
score of the insured or applicant;
(3) a list of the specific factors contained in the credit history
of the insured or applicant that were used to derive a credit
score that negatively affected the insurability of the insured
or applicant; and
(4) an explanation of how the factors listed under subdivision
(3) negatively affected the insurability of the insured or
applicant.
However, if an explanation described in this subsection was
provided in the notice provided under section 14.1 of this chapter,
the insurer is not required to provide an explanation under this
section.
SOURCE: IC 27-4-1-4; (02)IN1384.1.4. -->
SECTION 4. IC
27-4-1-4
, AS AMENDED BY P.L.132-2001,
SECTION 8, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
JULY 1, 2002]: Sec. 4.
The following are hereby defined as unfair
methods of competition and unfair and deceptive acts and practices in
the business of insurance:
(1) Making, issuing, circulating, or causing to be made, issued, or
circulated, any estimate, illustration, circular, or statement:
(A) misrepresenting the terms of any policy issued or to be
issued or the benefits or advantages promised thereby or the
dividends or share of the surplus to be received thereon;
(B) making any false or misleading statement as to the
dividends or share of surplus previously paid on similar
policies;
(C) making any misleading representation or any
misrepresentation as to the financial condition of any insurer,
or as to the legal reserve system upon which any life insurer
operates;
(D) using any name or title of any policy or class of policies
misrepresenting the true nature thereof; or
(E) making any misrepresentation to any policyholder insured
in any company for the purpose of inducing or tending to
induce such policyholder to lapse, forfeit, or surrender his
insurance.
(2) Making, publishing, disseminating, circulating, or placing
before the public, or causing, directly or indirectly, to be made,
published, disseminated, circulated, or placed before the public,
in a newspaper, magazine, or other publication, or in the form of
a notice, circular, pamphlet, letter, or poster, or over any radio or
television station, or in any other way, an advertisement,
announcement, or statement containing any assertion,
representation, or statement with respect to any person in the
conduct of his insurance business, which is untrue, deceptive, or
misleading.
(3) Making, publishing, disseminating, or circulating, directly or
indirectly, or aiding, abetting, or encouraging the making,
publishing, disseminating, or circulating of any oral or written
statement or any pamphlet, circular, article, or literature which is
false, or maliciously critical of or derogatory to the financial
condition of an insurer, and which is calculated to injure any
person engaged in the business of insurance.
(4) Entering into any agreement to commit, or individually or by
a concerted action committing any act of boycott, coercion, or
intimidation resulting or tending to result in unreasonable
restraint of, or a monopoly in, the business of insurance.
(5) Filing with any supervisory or other public official, or making,
publishing, disseminating, circulating, or delivering to any person,
or placing before the public, or causing directly or indirectly, to
be made, published, disseminated, circulated, delivered to any
person, or placed before the public, any false statement of
financial condition of an insurer with intent to deceive. Making
any false entry in any book, report, or statement of any insurer
with intent to deceive any agent or examiner lawfully appointed
to examine into its condition or into any of its affairs, or any
public official to which such insurer is required by law to report,
or which has authority by law to examine into its condition or into
any of its affairs, or, with like intent, willfully omitting to make a
true entry of any material fact pertaining to the business of such
insurer in any book, report, or statement of such insurer.
(6) Issuing or delivering or permitting agents, officers, or
employees to issue or deliver, agency company stock or other
capital stock, or benefit certificates or shares in any common law
corporation, or securities or any special or advisory board
contracts or other contracts of any kind promising returns and
profits as an inducement to insurance.
(7) Making or permitting any of the following:
(A) Unfair discrimination between individuals of the same
class and equal expectation of life in the rates or assessments
charged for any contract of life insurance or of life annuity or
in the dividends or other benefits payable thereon, or in any
other of the terms and conditions of such contract; however, in
determining the class, consideration may be given to the
nature of the risk, plan of insurance, the actual or expected
expense of conducting the business, or any other relevant
factor.
(B) Unfair discrimination between individuals of the same
class involving essentially the same hazards in the amount of
premium, policy fees, assessments, or rates charged or made
for any policy or contract of accident or health insurance or in
the benefits payable thereunder, or in any of the terms or
conditions of such contract, or in any other manner whatever;
however, in determining the class, consideration may be given
to the nature of the risk, the plan of insurance, the actual or
expected expense of conducting the business, or any other
relevant factor.
(C) Excessive or inadequate charges for premiums, policy
fees, assessments, or rates, or making or permitting any unfair
discrimination between persons of the same class involving
essentially the same hazards, in the amount of premiums,
policy fees, assessments, or rates charged or made for:
(i) policies or contracts of reinsurance or joint reinsurance,
or abstract and title insurance;
(ii) policies or contracts of insurance against loss or damage
to aircraft, or against liability arising out of the ownership,
maintenance, or use of any aircraft, or of vessels or craft,
their cargoes, marine builders' risks, marine protection and
indemnity, or other risks commonly insured under marine,
as distinguished from inland marine, insurance; or
(iii) policies or contracts of any other kind or kinds of
insurance whatsoever.
However, nothing contained in clause (C) shall be construed to
apply to any of the kinds of insurance referred to in clauses (A)
and (B) nor to reinsurance in relation to such kinds of insurance.
Nothing in clause (A), (B), or (C) shall be construed as making or
permitting any excessive, inadequate, or unfairly discriminatory
charge or rate or any charge or rate determined by the department
or commissioner to meet the requirements of any other insurance
rate regulatory law of this state.
(8) Except as otherwise expressly provided by law, knowingly
permitting or offering to make or making any contract or policy
of insurance of any kind or kinds whatsoever, including but not in
limitation, life annuities, or agreement as to such contract or
policy other than as plainly expressed in such contract or policy
issued thereon, or paying or allowing, or giving or offering to pay,
allow, or give, directly or indirectly, as inducement to such
insurance, or annuity, any rebate of premiums payable on the
contract, or any special favor or advantage in the dividends,
savings, or other benefits thereon, or any valuable consideration
or inducement whatever not specified in the contract or policy; or
giving, or selling, or purchasing or offering to give, sell, or
purchase as inducement to such insurance or annuity or in
connection therewith, any stocks, bonds, or other securities of any
insurance company or other corporation, association, limited
liability company, or partnership, or any dividends, savings, or
profits accrued thereon, or anything of value whatsoever not
specified in the contract. Nothing in this subdivision and
subdivision (7) shall be construed as including within the
definition of discrimination or rebates any of the following
practices:
(A) Paying bonuses to policyholders or otherwise abating their
premiums in whole or in part out of surplus accumulated from
nonparticipating insurance, so long as any such bonuses or
abatement of premiums are fair and equitable to policyholders
and for the best interests of the company and its policyholders.
(B) In the case of life insurance policies issued on the
industrial debit plan, making allowance to policyholders who
have continuously for a specified period made premium
payments directly to an office of the insurer in an amount
which fairly represents the saving in collection expense.
(C) Readjustment of the rate of premium for a group insurance
policy based on the loss or expense experience thereunder, at
the end of the first year or of any subsequent year of insurance
thereunder, which may be made retroactive only for such
policy year.
(D) Paying by an insurer or agent thereof duly licensed as such
under the laws of this state of money, commission, or
brokerage, or giving or allowing by an insurer or such licensed
agent thereof anything of value, for or on account of the
solicitation or negotiation of policies or other contracts of any
kind or kinds, to a broker, agent, or solicitor duly licensed
under the laws of this state, but such broker, agent, or solicitor
receiving such consideration shall not pay, give, or allow
credit for such consideration as received in whole or in part,
directly or indirectly, to the insured by way of rebate.
(9) Requiring, as a condition precedent to loaning money upon the
security of a mortgage upon real property, that the owner of the
property to whom the money is to be loaned negotiate any policy
of insurance covering such real property through a particular
insurance agent or broker or brokers. However, this subdivision
shall not prevent the exercise by any lender of its or his right to
approve or disapprove of the insurance company selected by the
borrower to underwrite the insurance.
(10) Entering into any contract, combination in the form of a trust
or otherwise, or conspiracy in restraint of commerce in the
business of insurance.
(11) Monopolizing or attempting to monopolize or combining or
conspiring with any other person or persons to monopolize any
part of commerce in the business of insurance. However,
participation as a member, director, or officer in the activities of
any nonprofit organization of agents or other workers in the
insurance business shall not be interpreted, in itself, to constitute
a combination in restraint of trade or as combining to create a
monopoly as provided in this subdivision and subdivision (10).
The enumeration in this chapter of specific unfair methods of
competition and unfair or deceptive acts and practices in the
business of insurance is not exclusive or restrictive or intended to
limit the powers of the commissioner or department or of any
court of review under section 8 of this chapter.
(12) Requiring as a condition precedent to the sale of real or
personal property under any contract of sale, conditional sales
contract, or other similar instrument or upon the security of a
chattel mortgage, that the buyer of such property negotiate any
policy of insurance covering such property through a particular
insurance company, agent, or broker or brokers. However, this
subdivision shall not prevent the exercise by any seller of such
property or the one making a loan thereon, of his, her, or its right
to approve or disapprove of the insurance company selected by
the buyer to underwrite the insurance.
(13) Issuing, offering, or participating in a plan to issue or offer,
any policy or certificate of insurance of any kind or character as
an inducement to the purchase of any property, real, personal, or
mixed, or services of any kind, where a charge to the insured is
not made for and on account of such policy or certificate of
insurance. However, this subdivision shall not apply to any of the
following:
(A) Insurance issued to credit unions or members of credit
unions in connection with the purchase of shares in such credit
unions.
(B) Insurance employed as a means of guaranteeing the
performance of goods and designed to benefit the purchasers
or users of such goods.
(C) Title insurance.
(D) Insurance written in connection with an indebtedness and
intended as a means of repaying such indebtedness in the
event of the death or disability of the insured.
(E) Insurance provided by or through motorists service clubs
or associations.
(F) Insurance that is provided to the purchaser or holder of an
air transportation ticket and that:
(i) insures against death or nonfatal injury that occurs during
the flight to which the ticket relates;
(ii) insures against personal injury or property damage that
occurs during travel to or from the airport in a common
carrier immediately before or after the flight;
(iii) insures against baggage loss during the flight to which
the ticket relates; or
(iv) insures against a flight cancellation to which the ticket
relates.
(14) Refusing, because of the for-profit status of a hospital or
medical facility, to make payments otherwise required to be made
under a contract or policy of insurance for charges incurred by an
insured in such a for-profit hospital or other for-profit medical
facility licensed by the state department of health.
(15) Refusing to insure an individual, refusing to continue to issue
insurance to an individual, limiting the amount, extent, or kind of
coverage available to an individual, or charging an individual a
different rate for the same coverage, solely because of that
individual's blindness or partial blindness, except where the
refusal, limitation, or rate differential is based on sound actuarial
principles or is related to actual or reasonably anticipated
experience.
(16) Committing or performing, with such frequency as to
indicate a general practice, unfair claim settlement practices (as
defined in section 4.5 of this chapter).
(17) Between policy renewal dates, unilaterally canceling an
individual's coverage under an individual or group health
insurance policy solely because of the individual's medical or
physical condition.
(18) Using a policy form or rider that would permit a cancellation
of coverage as described in subdivision (17).
(19) Violating IC
27-1-22-25
or IC
27-1-22-26
concerning motor
vehicle insurance rates.
(20) Violating IC
27-8-21-2
concerning advertisements referring
to interest rate guarantees.
(21) Violating IC
27-8-24.3
concerning insurance and health plan
coverage for victims of abuse.
(22) Violating IC
27-8-26
concerning genetic screening or testing.
(23) Violating IC
27-1-15.6-3
(b) concerning licensure of
insurance producers.
(24) Violating IC 27-2-21 concerning underwriting of
property and casualty insurance.