HB 0987 2003
1	A bill to be entitled
2	An act relating to the use of credit reports by insurers;
3	creating s. 626.9741, F.S.; specifying that the act's
4	purpose is to regulate and limit the use of credit reports
5	by insurers for underwriting and rating purposes;
6	specifying the types of insurance to which the section
7	applies; defining terms; requiring insurers to notify
8	applicants and insureds of the use of credit reports and
9	to provide a copy of the credit report; prohibiting
10	insurers from making adverse underwriting decisions based
11	on certain credit information or under certain
12	circumstances; authorizing the Financial Services
13	Commission to adopt rules; requiring the Office of
14	Insurance Regulation to approve an insurer's methodology
15	for using credit reports and to conduct a study of the use
16	of credit reports for underwriting and rating purposes;
17	providing for application; providing an effective date.
18
19	Be It Enacted by the Legislature of the State of Florida:
20
21	Section 1. Section 626.9741, Florida Statutes, is created
22	to read:
23	626.9741 Use of credit reports by insurers.--
24	(1) The purpose of this section is to regulate and limit
25	the use of credit reports by insurers for underwriting and
26	rating purposes. This section applies only to personal lines
27	motor vehicle insurance and homeowner's insurance.
28	(2) As used in this section, the term:
29	(a) "Adverse underwriting decision" means a decision to
30	deny or nonrenew a policy of insurance, to issue a policy with
31	exclusions or restrictions, or to increase the rates or premium
32	charged for the policy of insurance.
33	(b) "Credit report" means any written, oral, or other
34	communication of any information by a consumer reporting agency,
35	as defined in the Federal Fair Credit Reporting Act, 15 U.S.C.
36	ss.1681, et seq., bearing on a consumer's credit worthiness,
37	credit standing, or credit capacity, which is used or expected
38	to be used or collected as a factor to establish a person's
39	eligibility for credit or insurance or any other purpose
40	authorized pursuant to the applicable provision of the Federal
41	Fair Credit Reporting Act.
42	(3) An insurer must notify the applicant or insured, in
43	writing, prior to requesting a credit report, that a credit
44	report is being requested and may be used for underwriting or
45	rating purposes. An insurer that makes an adverse underwriting
46	decision based upon a credit report must provide, or designate a
47	third party to provide, a copy of the credit report to the
48	applicant or insured and must identify the specific items in the
49	credit report which resulted in the adverse underwriting
50	decision.
51	(4)(a) An insurer may not make an adverse underwriting
52	decision solely because of credit information contained in a
53	credit report.
54	(b) An insurer may not make an adverse underwriting
55	decision based on:
56	1. The absence of, or an insufficient, credit history;
57	2. The number of credit reports or credit inquiries
58	requested or made regarding the applicant or insured;
59	3. Credit problems resulting from medical bills; or
60	4. Any other special circumstance that the Financial
61	Services Commission determines, by rule, does not pose an
62	increased insurance risk.
63	(c) An insurer may not request a credit report based upon
64	the race, color, creed, marital status, gender, or national
65	origin of the applicant or insured.
66	(5) An insurer may not use a credit report as an
67	underwriting or rating factor unless the insurer provides the
68	Office of Insurance Regulation sufficient information for the
69	office to determine that the methodology used by the insurer
70	reasonably predicts the insurance risk posed by the applicant or
71	insured and that the weight given to the credit information is
72	reasonable compared to other factors affecting insurance risk.
73	Any premium increase imposed by an insurer based on credit
74	information contained in a credit report must be consistent with
75	the rates filed with and approved by the Office of Insurance
76	Regulation pursuant to the applicable insurance rating laws and
77	rules.
78	(6) An insurer may not refuse to renew a policy or impose
79	a premium increase due to credit information contained in a
80	credit report until the insured has had an opportunity to
81	correct any errors in the credit report, as provided in this
82	subsection. The insurer must notify the insured that he or she
83	may correct or question the accuracy of the information on which
84	the nonrenewal or premium increase is based within 10 days after
85	receiving a copy of the credit report required to be provided by
86	subsection (3). If, within such period, the insured notifies the
87	insurer or a third party designated by the insurer, in writing,
88	that the insured questions the accuracy of the credit
89	information on which the nonrenewal or premium increase was
90	based, the nonrenewal or premium increase may not take effect
91	until 30 days after the accuracy of the credit information has
92	been verified and communicated to the insured. An insured must
93	cooperate in any such investigation. The insurer may nonrenew
94	the policy or impose the premium increase if the insured fails
95	to respond to relevant questions regarding the investigation
96	within 15 days after written notice to the insured.
97	(7) The Financial Services Commission may adopt rules to
98	administer this section.
99	Section 2. The Office of Insurance Regulation shall
100	conduct a study of the use of credit information as an
101	underwriting and rating factor. The study shall evaluate and
102	determine the increased risk of insurance loss posed by an
103	individual's credit worthiness, credit standing, or credit
104	capacity, and the appropriate weight that should be given to
105	such factors in determining insurability in conjunction with
106	other risk factors.
107	Section 3. This act shall take effect January 1, 2004, and
108	applies to policies issued or renewed on or after that date.