State of Illinois
92nd General Assembly

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HB2419 Engrossed                               LRB9207370JSpc

 1        AN ACT concerning insurance.

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

 4        Section 5.  The Illinois Insurance  Code  is  amended  by
 5    changing Section 1011 and adding Section 155.37 as follow:

 6        (215 ILCS 5/155.37 new)
 7        Sec. 155.37.  Use of credit information in underwriting.
 8        (a)  If  an insurer, or an agent on behalf of an insurer,
 9    uses credit criteria or a credit score, in whole or in  part,
10    as  a  reason  to  cancel  or  refuse to renew coverage or to
11    refuse to underwrite for a particular insurance risk or class
12    of  risk,  the  credit  criteria  or  credit  score  must  be
13    established and used in a manner that:
14             (1)  is not based, in  whole  or  in  part,  on  the
15        income, gender, race, color, religion, or national origin
16        of an applicant or insured; and
17             (2)  otherwise  complies  with  Article XXVI of this
18        Code.
19        (b)  The credit criteria or credit  scoring  may  not  be
20    used as a sole determinant for either the refusal to issue or
21    the refusal to renew a policy.

22        (215 ILCS 5/1011) (from Ch. 73, par. 1065.711)
23        Sec. 1011.  Reasons for Adverse Underwriting Decisions.
24        (A)  In the event of an adverse underwriting decision the
25    insurance  institution  or agent responsible for the decision
26    shall:
27             (1)  either provide the applicant,  policyholder  or
28        individual proposed for coverage with the specific reason
29        or  reasons  for  the  adverse  underwriting  decision in
30        writing or advise such person that upon  written  request
HB2419 Engrossed            -2-                LRB9207370JSpc
 1        he  or  she may receive the specific reason or reasons in
 2        writing;, and
 3             (2)  provide   the   applicant,   policyholder    or
 4        individual  proposed  for  coverage with a summary of the
 5        rights established under subsection (B) and Sections 1009
 6        and 1010 of this Article; and.
 7             (3)  if the adverse underwriting decision  is  based
 8        upon  a  report of credit worthiness, credit standing, or
 9        credit capacity that a company receives from  a  consumer
10        reporting  agency,  the  company  must  also  provide  in
11        writing  to  the  applicant,  policyholder, or individual
12        proposed for coverage the  specific  reason  or  reasons,
13        including  credit  score,  codes,  or  other credit-based
14        information used by the company in its underwriting,  and
15        if  the information is based upon a credit score or code,
16        the company must provide a written, easily understandable
17        explanation of the score or code and the  name,  address,
18        and  telephone  number  of  the consumer reporting agency
19        that provided the information.
20        (B)  Upon receipt of a written request within 90 business
21    days from  the  date  of  the  mailing  of  notice  or  other
22    communication  of  an  adverse  underwriting  decision  to an
23    applicant, policyholder or individual proposed for  coverage,
24    the  insurance  institution  or  agent  shall furnish to such
25    person within 21 business days from the date  of  receipt  of
26    such written request:
27             (1)  the  specific reason or reasons for the adverse
28        underwriting decision, in writing,  if  such  information
29        was  not  initially  furnished  in  writing  pursuant  to
30        paragraph (1) of subsection (A);
31             (2)  the  specific  items of personal and privileged
32        information  that    support  those  reasons;   provided,
33        however:
34                  (a)  the  insurance  institution or agent shall
HB2419 Engrossed            -3-                LRB9207370JSpc
 1             not  be  required  to  furnish  specific  items   of
 2             privileged   information   if   it   has  reasonable
 3             suspicion, based upon specific information available
 4             for review by  the  Director,  that  the  applicant,
 5             policyholder or individual proposed for coverage has
 6             engaged   in   criminal  activity,  fraud,  material
 7             misrepresentation or material nondisclosure, and
 8                  (b)  specific    items    of     medical-record
 9             information  supplied  by a medical-care institution
10             or medical professional shall  be  disclosed  either
11             directly   to   the   individual   about   whom  the
12             information relates or  to  a  medical  professional
13             designated by the individual and licensed to provide
14             medical  care with respect to the condition to which
15             the information  relates,  whichever  the  insurance
16             institution or agent prefers; and
17             (3)  the  names  and  addresses of the institutional
18        sources that supplied the specific items  of  information
19        pursuant  to  paragraph  (2) of subsection (B); provided,
20        however, that the identity of any medical professional or
21        medical-care  institution  shall  be   disclosed   either
22        directly  to  the individual or to the designated medical
23        professional,  whichever  the  insurance  institution  or
24        agent prefers.
25        (C)  The obligations imposed  by  this  Section  upon  an
26    insurance  institution  or  agent may be satisfied by another
27    insurance institution or  agent  authorized  to  act  on  its
28    behalf.
29        (D)  When an adverse underwriting decision results solely
30    from  an  oral request or inquiry, the explanation of reasons
31    and summary of rights required by subsection (A) may be given
32    orally.
33    (Source: P.A. 82-108.)
HB2419 Engrossed            -4-                LRB9207370JSpc
 1        Section 99.  Effective date. This Act takes  effect  upon
 2    becoming law.

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