HS HCS HB 1502 & 1821 -- INSURANCE (Luetkenhaus)

This substitute restricts how insurers may use an applicant's
credit information in their underwriting practices in automobile
and property insurance.

The substitute prohibits insurers from taking an adverse action
against an applicant or insured based upon credit information
when:

(1)  Credit information is the only underwriting factor;

(2)  Using information contained in a credit report that the
insurer knows to be in dispute; or

(3)  Renewing a contract, until the third anniversary date of
such a contract.

The substitute defines "adverse action."

The substitute also prohibits insurers from:

(1)  Providing credit information to third parties, unless
specifically authorized by the federal Fair Credit Reporting Act;
and

(2)  Using the number of insurance inquiries an applicant makes
as a negative factor in their insurance scoring formulas.

The substitute requires insurers to:

(1)  Inform the applicant, at the time of application, if credit
information may be used as an underwriting factor;

(2)  Inform the applicant about his or her rights regarding their
credit information when a credit report adversely affects the
applicant; and

(3)  Provide to the applicant or insured a statement of reasons
for taking any adverse action which was based upon credit
information if the insured or applicant requests such a statement
within 30 days of the adverse action.  The statement must be
clear and specific, so that a person of average intelligence can
identify the basis for the insurer's decision without further
inquiry.  Applicants and insureds may request reevaluation within
30 days following any correction to their credit report.

The substitute applies to insurance contracts entered into on or
after July 1, 2003.

FISCAL NOTE:  Estimated Net Income to Insurance Dedicated Fund of
$0 to $33,900 in FY 2003, $0 in FY 2004, and $0 in FY 2005.

Missouri House of Representatives
Last Updated October 11, 2002 at 9:01 am