Florida Senate - 2012                        COMMITTEE AMENDMENT
       Bill No. SB 102
       
       
       
       
       
       
                                Barcode 962830                          
       
                              LEGISLATIVE ACTION                        
                    Senate             .             House              
                  Comm: FAV            .                                
                  01/19/2012           .                                
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       The Committee on Commerce and Tourism (Detert) recommended the
       following:
       
    1         Senate Amendment to Amendment (792042) (with title
    2  amendment)
    3  
    4         Between lines 84 and 85
    5  insert:
    6         Section 2. Paragraphs (o) and (x) of subsection (1) of
    7  section 626.9541, Florida Statutes, are amended to read:
    8         626.9541 Unfair methods of competition and unfair or
    9  deceptive acts or practices defined.—
   10         (1) UNFAIR METHODS OF COMPETITION AND UNFAIR OR DECEPTIVE
   11  ACTS.—The following are defined as unfair methods of competition
   12  and unfair or deceptive acts or practices:
   13         (o) Illegal dealings in premiums; excess or reduced charges
   14  for insurance.—
   15         1. Knowingly collecting any sum as a premium or charge for
   16  insurance, which is not then provided, or is not in due course
   17  to be provided, subject to acceptance of the risk by the
   18  insurer, by an insurance policy issued by an insurer as
   19  permitted by this code.
   20         2. Knowingly collecting as a premium or charge for
   21  insurance any sum in excess of or less than the premium or
   22  charge applicable to such insurance, in accordance with the
   23  applicable classifications and rates as filed with and approved
   24  by the office, and as specified in the policy; or, in cases when
   25  classifications, premiums, or rates are not required by this
   26  code to be so filed and approved, premiums and charges collected
   27  from a Florida resident in excess of or less than those
   28  specified in the policy and as fixed by the insurer. This
   29  provision does shall not be deemed to prohibit the charging and
   30  collection, by surplus lines agents licensed under part VIII of
   31  this chapter, of the amount of applicable state and federal
   32  taxes, or fees as authorized by s. 626.916(4), in addition to
   33  the premium required by the insurer or the charging and
   34  collection, by licensed agents, of the exact amount of any
   35  discount or other such fee charged by a credit card facility in
   36  connection with the use of a credit card, as authorized by
   37  subparagraph (q)3., in addition to the premium required by the
   38  insurer. This subparagraph does shall not be construed to
   39  prohibit collection of a premium for a universal life or a
   40  variable or indeterminate value insurance policy made in
   41  accordance with the terms of the contract.
   42         3.a. Imposing or requesting an additional premium for a
   43  policy of motor vehicle liability, personal injury protection,
   44  medical payment, or collision insurance or any combination
   45  thereof or refusing to renew the policy solely because the
   46  insured was involved in a motor vehicle accident unless the
   47  insurer’s file contains information from which the insurer in
   48  good faith determines that the insured was substantially at
   49  fault in the accident.
   50         b. An insurer that which imposes and collects such a
   51  surcharge or which refuses to renew such policy shall, in
   52  conjunction with the notice of premium due or notice of
   53  nonrenewal, notify the named insured that he or she is entitled
   54  to reimbursement of such amount or renewal of the policy under
   55  the conditions listed below and will subsequently reimburse him
   56  or her or renew the policy, if the named insured demonstrates
   57  that the operator involved in the accident was:
   58         (I) Lawfully parked;
   59         (II) Reimbursed by, or on behalf of, a person responsible
   60  for the accident or has a judgment against such person;
   61         (III) Struck in the rear by another vehicle headed in the
   62  same direction and was not convicted of a moving traffic
   63  violation in connection with the accident;
   64         (IV) Hit by a “hit-and-run” driver, if the accident was
   65  reported to the proper authorities within 24 hours after
   66  discovering the accident;
   67         (V) Not convicted of a moving traffic violation in
   68  connection with the accident, but the operator of the other
   69  automobile involved in such accident was convicted of a moving
   70  traffic violation;
   71         (VI) Finally adjudicated not to be liable by a court of
   72  competent jurisdiction;
   73         (VII) In receipt of a traffic citation which was dismissed
   74  or nolle prossed; or
   75         (VIII) Not at fault as evidenced by a written statement
   76  from the insured establishing facts demonstrating lack of fault
   77  which are not rebutted by information in the insurer’s file from
   78  which the insurer in good faith determines that the insured was
   79  substantially at fault.
   80         c. In addition to the other provisions of this
   81  subparagraph, an insurer may not fail to renew a policy if the
   82  insured has had only one accident in which he or she was at
   83  fault within the current 3-year period. However, an insurer may
   84  nonrenew a policy for reasons other than accidents in accordance
   85  with s. 627.728. This subparagraph does not prohibit nonrenewal
   86  of a policy under which the insured has had three or more
   87  accidents, regardless of fault, during the most recent 3-year
   88  period.
   89         4. Imposing or requesting an additional premium for, or
   90  refusing to renew, a policy for motor vehicle insurance solely
   91  because the insured committed a noncriminal traffic infraction
   92  as described in s. 318.14 unless the infraction is:
   93         a. A second infraction committed within an 18-month period,
   94  or a third or subsequent infraction committed within a 36-month
   95  period.
   96         b. A violation of s. 316.183, when such violation is a
   97  result of exceeding the lawful speed limit by more than 15 miles
   98  per hour.
   99         5. Upon the request of the insured, the insurer and
  100  licensed agent shall supply to the insured the complete proof of
  101  fault or other criteria that which justifies the additional
  102  charge or cancellation.
  103         6. An No insurer may not shall impose or request an
  104  additional premium for motor vehicle insurance, cancel or refuse
  105  to issue a policy, or refuse to renew a policy because the
  106  insured or the applicant is a handicapped or physically disabled
  107  person, so long as such handicap or physical disability does not
  108  substantially impair such person’s mechanically assisted driving
  109  ability.
  110         7. An No insurer may not cancel or otherwise terminate any
  111  insurance contract or coverage, or require execution of a
  112  consent to rate endorsement, during the stated policy term for
  113  the purpose of offering to issue, or issuing, a similar or
  114  identical contract or coverage to the same insured with the same
  115  exposure at a higher premium rate or continuing an existing
  116  contract or coverage with the same exposure at an increased
  117  premium.
  118         8. An No insurer may not issue a nonrenewal notice on any
  119  insurance contract or coverage, or require execution of a
  120  consent to rate endorsement, for the purpose of offering to
  121  issue, or issuing, a similar or identical contract or coverage
  122  to the same insured at a higher premium rate or continuing an
  123  existing contract or coverage at an increased premium without
  124  meeting any applicable notice requirements.
  125         9. An No insurer may not shall, with respect to premiums
  126  charged for motor vehicle insurance, unfairly discriminate
  127  solely on the basis of age, sex, marital status, or scholastic
  128  achievement.
  129         10. An insurer may not use any rate, rating schedule,
  130  rating manual, or underwriting rule that is not contained in a
  131  rating manual and that is determined in whole or in part on the
  132  basis of an insured's credit report or credit score as defined
  133  in s. 626.9741.
  134         11.10. Imposing or requesting an additional premium for
  135  motor vehicle comprehensive or uninsured motorist coverage
  136  solely because the insured was involved in a motor vehicle
  137  accident or was convicted of a moving traffic violation.
  138         12.11.An No insurer may not shall cancel or issue a
  139  nonrenewal notice on any insurance policy or contract without
  140  complying with any applicable cancellation or nonrenewal
  141  provision required under the Florida Insurance Code.
  142         13.12.An No insurer may not shall impose or request an
  143  additional premium, cancel a policy, or issue a nonrenewal
  144  notice on any insurance policy or contract because of any
  145  traffic infraction when adjudication has been withheld and no
  146  points have been assessed pursuant to s. 318.14(9) and (10).
  147  However, this subparagraph does not apply to traffic infractions
  148  involving accidents in which the insurer has incurred a loss due
  149  to the fault of the insured.
  150         (x) Refusal to insure.—In addition to other provisions of
  151  this code, the refusal to insure, or continue to insure, any
  152  individual or risk solely because of:
  153         1. Race, color, creed, marital status, sex, or national
  154  origin;
  155         2. The residence, age, or lawful occupation of the
  156  individual or the location of the risk, unless there is a
  157  reasonable relationship between the residence, age, or lawful
  158  occupation of the individual or the location of the risk and the
  159  coverage issued or to be issued;
  160         3. The insured’s or applicant’s failure to agree to place
  161  collateral business with any insurer, unless the coverage
  162  applied for would provide liability coverage which is excess
  163  over that provided in policies maintained on property or motor
  164  vehicles;
  165         4. The insured’s or applicant’s failure to purchase
  166  noninsurance services or commodities, including automobile
  167  services as defined in s. 624.124;
  168         5. The fact that the insured or applicant is a public
  169  official; or
  170         6. The fact that the insured or applicant had been
  171  previously refused insurance coverage by any insurer, when such
  172  refusal to insure or continue to insure for this reason occurs
  173  with such frequency as to indicate a general business practice.
  174         7. The insured's or applicant's credit report or credit
  175  score as defined in s. 626.9741.
  176         Section 3. Section 626.9741, Florida Statutes, is amended
  177  to read:
  178         626.9741 Use of credit reports and credit scores by
  179  insurers.—
  180         (1) An insurer may not use credit reports or credit scores
  181  in making rating determinations. The purpose of this section is
  182  to regulate and limit the use of credit reports and credit
  183  scores by insurers for underwriting and rating purposes. This
  184  section applies only to personal lines motor vehicle insurance
  185  and personal lines residential insurance, which includes
  186  homeowners, mobile home owners’ dwelling, tenants, condominium
  187  unit owners, cooperative unit owners, and similar types of
  188  insurance.
  189         (2) As used in this section, the term:
  190         (a) “Adverse decision” means a decision to refuse to issue
  191  or renew a policy of insurance; to issue a policy with
  192  exclusions or restrictions; to increase the rates or premium
  193  charged for a policy of insurance; to place an insured or
  194  applicant in a rating tier that does not have the lowest
  195  available rates for which that insured or applicant is otherwise
  196  eligible; or to place an applicant or insured with a company
  197  operating under common management, control, or ownership which
  198  does not offer the lowest rates available, within the affiliate
  199  group of insurance companies, for which that insured or
  200  applicant is otherwise eligible.
  201         (a)(b) “Credit report” means any written, oral, or other
  202  communication of any information by a consumer reporting agency,
  203  as defined in the federal Fair Credit Reporting Act, 15 U.S.C.
  204  ss. 1681 et seq., bearing on a consumer’s credit worthiness,
  205  credit standing, or credit capacity, which is used or expected
  206  to be used or collected as a factor to establish a person’s
  207  eligibility for credit or insurance, or any other purpose
  208  authorized pursuant to the applicable provision of such federal
  209  act. A credit score alone, as calculated by a credit reporting
  210  agency or by or for the insurer, may not be considered a credit
  211  report.
  212         (b)(c) “Credit score” means a score, grade, or value that
  213  is derived by using any or all data from a credit report in any
  214  type of model, method, or program, whether electronically, in an
  215  algorithm, computer software or program, or any other process,
  216  for the purpose of grading or ranking credit report data.
  217         (d) “Tier” means a category within a single insurer into
  218  which insureds with substantially similar risk, exposure, or
  219  expense factors are placed for purposes of determining rate or
  220  premium.
  221         (3) An insurer must inform an applicant or insured, in the
  222  same medium as the application is taken, that a credit report or
  223  score is being requested for underwriting or rating purposes. An
  224  insurer that makes an adverse decision based, in whole or in
  225  part, upon a credit report must provide at no charge, a copy of
  226  the credit report to the applicant or insured or provide the
  227  applicant or insured with the name, address, and telephone
  228  number of the consumer reporting agency from which the insured
  229  or applicant may obtain the credit report. The insurer must
  230  provide notification to the consumer explaining the reasons for
  231  the adverse decision. The reasons must be provided in
  232  sufficiently clear and specific language so that a person can
  233  identify the basis for the insurer’s adverse decision. Such
  234  notification shall include a description of the four primary
  235  reasons, or such fewer number as existed, which were the primary
  236  influences of the adverse decision. The use of generalized terms
  237  such as “poor credit history,” “poor credit rating,” or “poor
  238  insurance score” does not meet the explanation requirements of
  239  this subsection. A credit score may not be used in underwriting
  240  or rating insurance unless the scoring process produces
  241  information in sufficient detail to permit compliance with the
  242  requirements of this subsection. It shall not be deemed an
  243  adverse decision if, due to the insured’s credit report or
  244  credit score, the insured continues to receive a less favorable
  245  rate or placement in a less favorable tier or company at the
  246  time of renewal except for renewals or reunderwriting required
  247  by this section.
  248         (4)(a) An insurer may not request a credit report or score
  249  based upon the race, color, religion, marital status, age,
  250  gender, income, national origin, or place of residence of the
  251  applicant or insured.
  252         (b) An insurer may not make an adverse decision solely
  253  because of information contained in a credit report or score
  254  without consideration of any other underwriting or rating
  255  factor.
  256         (c) An insurer may not make an adverse decision or use a
  257  credit score that could lead to such a decision if based, in
  258  whole or in part, on:
  259         1. The absence of, or an insufficient, credit history, in
  260  which instance the insurer shall:
  261         a. Treat the consumer as otherwise approved by the Office
  262  of Insurance Regulation if the insurer presents information that
  263  such an absence or inability is related to the risk for the
  264  insurer;
  265         b. Treat the consumer as if the applicant or insured had
  266  neutral credit information, as defined by the insurer;
  267         c. Exclude the use of credit information as a factor and
  268  use only other underwriting criteria;
  269         2. Collection accounts with a medical industry code, if so
  270  identified on the consumer’s credit report;
  271         3. Place of residence; or
  272         4. Any other circumstance that the Financial Services
  273  Commission determines, by rule, lacks sufficient statistical
  274  correlation and actuarial justification as a predictor of
  275  insurance risk.
  276         (d) An insurer may use the number of credit inquiries
  277  requested or made regarding the applicant or insured except for:
  278         1. Credit inquiries not initiated by the consumer or
  279  inquiries requested by the consumer for his or her own credit
  280  information.
  281         2. Inquiries relating to insurance coverage, if so
  282  identified on a consumer’s credit report.
  283         3. Collection accounts with a medical industry code, if so
  284  identified on the consumer’s credit report.
  285         4. Multiple lender inquiries, if coded by the consumer
  286  reporting agency on the consumer’s credit report as being from
  287  the home mortgage industry and made within 30 days of one
  288  another, unless only one inquiry is considered.
  289         5. Multiple lender inquiries, if coded by the consumer
  290  reporting agency on the consumer’s credit report as being from
  291  the automobile lending industry and made within 30 days of one
  292  another, unless only one inquiry is considered.
  293         (e) An insurer must, upon the request of an applicant or
  294  insured, provide a means of appeal for an applicant or insured
  295  whose credit report or credit score is unduly influenced by a
  296  dissolution of marriage, the death of a spouse, or temporary
  297  loss of employment. The insurer must complete its review within
  298  10 business days after the request by the applicant or insured
  299  and receipt of reasonable documentation requested by the
  300  insurer, and, if the insurer determines that the credit report
  301  or credit score was unduly influenced by any of such factors,
  302  the insurer shall treat the applicant or insured as if the
  303  applicant or insured had neutral credit information or shall
  304  exclude the credit information, as defined by the insurer,
  305  whichever is more favorable to the applicant or insured. An
  306  insurer shall not be considered out of compliance with its
  307  underwriting rules or rates or forms filed with the Office of
  308  Insurance Regulation or out of compliance with any other state
  309  law or rule as a result of granting any exceptions pursuant to
  310  this subsection.
  311         (5) A rate filing that uses credit reports or credit scores
  312  must comply with the requirements of s. 627.062 or s. 627.0651
  313  to ensure that rates are not excessive, inadequate, or unfairly
  314  discriminatory.
  315         (6) An insurer that requests or uses credit reports and
  316  credit scoring in its underwriting and rating methods shall
  317  maintain and adhere to established written procedures that
  318  reflect the restrictions set forth in the federal Fair Credit
  319  Reporting Act, this section, and all rules related thereto.
  320         (7)(a) An insurer shall establish procedures to review the
  321  credit history of an insured who was adversely affected by the
  322  use of the insured’s credit history at the initial rating of the
  323  policy, or at a subsequent renewal thereof. This review must be
  324  performed at a minimum of once every 2 years or at the request
  325  of the insured, whichever is sooner, and the insurer shall
  326  adjust the premium of the insured to reflect any improvement in
  327  the credit history. The procedures must provide that, with
  328  respect to existing policyholders, the review of a credit report
  329  will not be used by the insurer to cancel, refuse to renew, or
  330  require a change in the method of payment or payment plan.
  331         (b) However, as an alternative to the requirements of
  332  paragraph (a), an insurer that used a credit report or credit
  333  score for an insured upon inception of a policy, who will not
  334  use a credit report or score for reunderwriting, shall
  335  reevaluate the insured within the first 3 years after inception,
  336  based on other allowable underwriting or rating factors,
  337  excluding credit information if the insurer does not increase
  338  the rates or premium charged to the insured based on the
  339  exclusion of credit reports or credit scores.
  340         (3)(8) The commission may adopt rules to administer this
  341  section. The rules may include, but need not be limited to:
  342         (a) Information that must be included in filings to
  343  demonstrate compliance with subsection (3).
  344         (b) Statistical detail that insurers using credit reports
  345  or scores under subsection (5) must retain and report annually
  346  to the Office of Insurance Regulation.
  347         (c) Standards that ensure that rates or premiums associated
  348  with the use of a credit report or score are not unfairly
  349  discriminatory, based upon race, color, religion, marital
  350  status, age, gender, income, national origin, or place of
  351  residence.
  352         (d) Standards for review of models, methods, programs, or
  353  any other process by which to grade or rank credit report data
  354  and which may produce credit scores in order to ensure that the
  355  insurer demonstrates that such grading, ranking, or scoring is
  356  valid in predicting insurance risk of an applicant or insured.
  357  
  358  ================= T I T L E  A M E N D M E N T ================
  359         And the title is amended as follows:
  360         Delete line 101
  361  and insert:
  362         situations; amending s. 626.9541, F.S.; prohibiting an
  363         insurer using a rate, rating schedule, rating manual,
  364         or an underwriting rule that is not contained in a
  365         rating manual and is determined in whole or in part on
  366         the basis of a credit report or credit score of an
  367         insured; including the refusal to insure or continue
  368         to insure any individual or risk because of the
  369         insured's or applicant's credit report or credit score
  370         among the list of activities constituting unfair
  371         methods of competition and unfair or deceptive acts;
  372         amending s. 626.9741, F.S.; prohibiting the use by
  373         insurers of credit reports and credit scores in making
  374         rating determinations; deleting provisions limiting
  375         and regulating the use of credit scores by insurers
  376         when making rating determinations; deleting the
  377         definition of “adverse decision” and “tier”; providing
  378         an effective date.