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Public Act 096-0560


 

Public Act 0560 96TH GENERAL ASSEMBLY



 


 
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.

Effective Date: 8/18/2009