June 20, 2013, Introduced by Rep. Abed and referred to the Committee on Insurance.
A bill to amend 1956 PA 218, entitled
"The insurance code of 1956,"
by amending section 2153 (MCL 500.2153), as added by 2012 PA 206.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 2153. An insurer shall not use credit information or an
insurance score as any part of a decision to deny, cancel, or
nonrenew a personal insurance policy under chapters 21, 24, and 26.
However, credit information and an insurance score may be used to
determine premium installment payment options and availability. An
insurer shall not apply credit information or a credit-based
insurance score that is otherwise permitted under this act unless
all of the following are met:
(a) The insurer or its producer discloses, either on the
insurance application or at the time the application is taken, that
it may obtain credit information in connection with the
application. This disclosure shall be either written or provided to
an applicant in the same medium as the application for insurance.
An insurer may use the following disclosure statement:
"In connection with this application for insurance, we may
review your credit report or obtain or use a credit-based insurance
score based on the information contained in that credit report. We
may use a third party in connection with the development of your
insurance score.".
(b) The insurer or a third party on behalf of the insurer does
not use income, gender, address, zip code, ethnic group, religion,
marital status, or nationality of the insured or insurance
applicant in calculating an insurance score.
(c) The insurer does not take an adverse action against a
consumer because he or she does not have a credit card account.
However, an insurer may take an adverse action against that insured
if it is based on any other applicable factor that is independent
of the fact that the consumer does not have a credit card account.
(d) The insurer or a third party on behalf of the insurer does
not consider an absence of credit information or an inability to
calculate an insurance score in the rating of personal insurance.
unless
any resulting rate differential is filed with and not
disapproved
by the office of financial and insurance regulation.
The
office of financial and insurance regulation shall not
disapprove
a filing under this subdivision if it meets 1 of the
following:
(i) Is reasonably justified by differences in losses,
expenses,
or
both.
(ii) Provides the insured or insurance applicant with a
discount
that is not less, on average, than the average credit
based
discount received by the insurer's insureds in this state.
(e) The insurer or a third party on the insurer's behalf uses
a credit report issued within 90 days before the date an insurance
score based on that credit report is first applied to the insured.
(f) Upon the insured's request or with the insured's
permission the insured's producer's request at annual renewal, or
upon the insured's request during the course of the policy, an
insurer or a third party on the insurer's behalf shall obtain a new
credit report or insurance score and rerate the insured. An insurer
or a third party on the insurer's behalf is not required to obtain
a new credit report or recalculate the insurance score more
frequently than once in a 12-month period. An insurer or a third
party on the insurer's behalf may order a credit report upon any
renewal if the insurer does so using a consistent methodology with
all its insureds.
(g) For insurance scores calculated or recalculated on or
after
the effective date of the amendatory act that added this
section,
March 28, 2013, the insurer or a third party on the
insurer's behalf does not use the following as a negative factor in
any insurance score or in reviewing credit information:
(i) Credit inquiries not initiated by the consumer or requested
by the consumer for his or her own credit information.
(ii) Credit inquiries relating to insurance coverage, if so
identified on an insured's or insurance applicant's credit report.
(iii) Multiple lender inquiries, if coded by the consumer
reporting agency on the credit report as being from the home
mortgage industry and made within 30 days of one another, unless
only 1 inquiry is considered.
(iv) Multiple lender inquiries, if coded by the consumer
reporting agency on the credit report as being from the automobile
lending industry and made within 30 days of one another, unless
only 1 inquiry is considered.
(v) Collection accounts with a medical industry code, if so
identified on the consumer's credit report.