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| Public Act 096-0560 |
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AN ACT concerning regulation.
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Be it enacted by the People of the State of Illinois,
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represented in the General Assembly:
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Section 5. The Use of Credit Information in Personal | ||||
Insurance Act is amended by changing Section 20 as follows:
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(215 ILCS 157/20)
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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:
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(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.
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(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
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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.
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(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.
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(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.
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(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:
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(A) Treats the consumer as otherwise filed with the
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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
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such treatment is actuarially justified.
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(B) Treats the consumer as if the applicant or | ||
insured had neutral
credit information, as defined by | ||
the insurer.
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(C) Excludes the use of credit information as a | ||
factor and uses only
other underwriting criteria.
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(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.
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(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:
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(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
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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.
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(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.
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(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
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if one of the following applies:
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(a) The insurer is treating the consumer as | ||
otherwise filed with
the Department.
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(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
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guidelines.
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(c) Credit was not used for underwriting or | ||
rating the insured when
the policy was initially | ||
written. However, the insurer shall have the
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discretion to use credit for underwriting or | ||
rating the insured upon renewal,
if consistent | ||
with its underwriting guidelines.
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(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.
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(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:
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(A) Credit inquiries not initiated by the consumer | ||
or inquiries
requested by the consumer for his or her | ||
own credit information.
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(B) Inquiries relating to insurance coverage, if | ||
so identified on a
consumer's credit report.
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(C) Collection accounts with a medical industry | ||
code, if so identified
on the consumer's credit report.
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(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
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made within 30 days of one another, unless only one | ||
inquiry is considered.
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(E) Multiple lender inquiries, if coded by the | ||
consumer reporting agency
on the consumer's credit | ||
report as being from the automobile lending industry
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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.
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(Source: P.A. 93-114, eff. 10-1-03; 93-477, eff. 10-1-03.)
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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. | ||