SS SCS HS HCS HB 1502 & 1821 -- USE OF CREDIT INFORMATION BY
INSURANCE UNDERWRITERS

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

The bill 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 the
contract.

Adverse action is defined.

The bill 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 bill 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
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 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 Department of Insurance may pursue civil forfeitures of up to
$100 for each violation by an insurer.

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

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