Public Act 096-0560
 		





HB0418 Enrolled
LRB096 07541 MJR 17636 b






    AN ACT concerning regulation.

 
    Be it enacted by the People of the State of Illinois,
 
represented in the General Assembly:


 
    Section 5. The Use of Credit Information in Personal 
Insurance Act is amended  by changing Section 20 as follows:
 



    (215 ILCS 157/20)



    Sec. 20. Use of credit information.  
    (a) An insurer authorized to do business
in this State that 
uses credit information to underwrite or rate risks shall
not:


        (1) Use an insurance score that is calculated using 
    income, gender,
address, ethnic group, religion, marital 
    status, or nationality of the consumer
as a factor.


        (2) Deny, cancel, or nonrenew a policy of personal 
    insurance solely on
the basis of credit information, 
    without consideration of any other applicable
underwriting 
    factor independent of credit information and not expressly

    prohibited by item (1).  An insurer shall not be considered 
    to have denied,
cancelled, or nonrenewed a policy if 
    coverage is available through an
affiliate. If an insurer 
    denies, cancels, or does not renew a policy of personal 
    insurance based on credit information, it must provide the 
    affected party with a notice as described in Section 35 of 
    this Act and an opportunity for the affected party to 
    explain its credit information under the procedures 
    outlined in Section 22 of this Act.



        (3) Base an insured's renewal rates for personal 
    insurance solely upon
credit information, without 
    consideration of any other applicable factor
independent 
    of credit information.  An insurer shall not be considered 
    to
have based rates solely on credit information if 
    coverage is available in a
different tier of the same 
    insurer.


        (4) Take an adverse action against a consumer solely 
    because he or she
does not have a credit card account, 
    without consideration of any other
applicable factor 
    independent of credit information.


        (5) Consider an absence of credit information or an 
    inability to calculate
an insurance score in underwriting 
    or rating personal insurance, unless the
insurer does one 
    of the following:


            (A) Treats the consumer as otherwise filed with the

        Department, if the insurer presents information that 
        such
an absence or inability relates to the risk for 
        the insurer and submits a
filing certification form 
        signed by an officer for the insurer certifying that

        such treatment is actuarially justified.


            (B) Treats the consumer as if the applicant or 
        insured had neutral
credit information, as defined by 
        the insurer.


            (C) Excludes the use of credit information as a 
        factor and uses only
other underwriting criteria.


        (6) Take an adverse action against a consumer based on 
    credit
information, unless an insurer obtains and uses a 
    credit report issued or an
insurance score calculated 
    within 90 days from the date the policy is first
written or 
    renewal is issued.


        (7) (Blank). Use credit information unless not later 
    than every 36 months
following the last time that the 
    insurer obtained current credit information
for the 
    insured, the insurer recalculates the insurance score or 
    obtains an
updated credit report. Regardless of the other 
    requirements of this Section:


            (A) At annual renewal, upon the request of a 
        consumer or the consumer's
agent, the insurer shall 
        re-underwrite and re-rate the policy based upon a

        current credit report or insurance score. An insurer 
        need not recalculate the
insurance score or obtain the 
        updated credit report of a consumer more
frequently 
        than once in a 12-month period.


            (B) The insurer shall have the discretion to obtain 
        current credit
information upon any renewal before the 
        expiration of 36 months, if
consistent with its 
        underwriting guidelines.


            (C) An insurer is not required to obtain current 
        credit information for
an insured, despite the 
        requirements of subitem (A) of item (7) of this Section

        if one of the following applies:


                (a) The insurer is treating the consumer as 
            otherwise filed with
the Department.


                (b) The insured is in the most 
            favorably-priced tier of the insurer,
within a 
            group of affiliated insurers. However, the insurer 
            shall have the
discretion to order credit 
            information, if consistent with its underwriting

            guidelines.


                (c) Credit was not used for underwriting or 
            rating the insured when
the policy was initially 
            written.  However, the insurer shall have the

            discretion to use credit for underwriting or 
            rating the insured upon renewal,
if consistent 
            with its underwriting guidelines.


                (d) The insurer re-evaluates the insured 
            beginning no later than 36
months after inception 
            and thereafter based upon other underwriting or 
            rating
factors, excluding credit information.


        (8) 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:


            (A) Credit inquiries not initiated by the consumer 
        or inquiries
requested by the consumer for his or her 
        own credit information.


            (B) Inquiries relating to insurance coverage, if 
        so identified on a
consumer's credit report.


            (C) Collection accounts with a medical industry 
        code, if so identified
on the consumer's credit report.


            (D) 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 30 days of one another, unless only one 
        inquiry is considered.


            (E) 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 30 days of one another, unless only one 
        inquiry is considered.
    (b) An insurer authorized to do business
in this State that 
uses credit information to underwrite or rate risks shall, at 
annual renewal upon the request of an insured or an insured's 
agent, re-underwrite and re-rate the insured's personal 
insurance policy based on a current credit report or insurance 
score unless one of the following applies:
        (1) The insurer's treatment of the consumer is 
    otherwise approved by the Department.
        (2) The insured is in the most favorably priced tier of 
    the insurer, within a group of affiliated insurers.
        (3) Credit information was not used for underwriting or 
    rating the insured when the personal insurance policy was 
    initially written.
        (4) The insurer reevaluates the insured at least every 
    36 months after a personal insurance policy is issued based 
    on underwriting or rating factors other than credit 
    information.
        (5) The insurer has recalculated an insurance score or 
    obtained an updated credit report of a consumer in the 
    previous 12-month period.
An insurer that uses credit information to underwrite or rate 
risks may obtain current credit information upon the renewal of 
a personal insurance policy when renewal occurs more frequently 
than every 36 months if consistent with the insurer's 
underwriting guidelines. 

(Source: P.A. 93-114, eff. 10-1-03; 93-477, eff. 10-1-03.)

 
    Section 10. The Public Utilities Act is amended  by adding 
Section 8-101.5 as follows:
 
    (220 ILCS 5/8-101.5  new)
    Sec. 8-101.5. Use of credit information of prospective and 
existing customers. A public utility may not deny, cancel, or 
nonrenew utility service  solely on
the basis of credit 
information of prospective or existing customers. If a public 
utility denies, cancels, or does not renew service based on 
credit information, it must provide the affected party with an 
explanation for the public utility's action and an opportunity 
for the affected party to explain its credit information. This 
Section does not apply to a telecommunications carrier or any 
of its affiliates.
 
    Section 99. Effective date. This Act takes effect upon 
becoming law.