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.