Senate Bill No. 376

(By Senator Love)

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[Introduced January 28, 2003; referred to the Committee on Banking and Insurance.]

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A BILL to amend and reenact section three, article six-b, chapter thirty-three of the code of West Virginia, one thousand nine hundred thirty-one, as amended; and to amend and reenact section six, article seventeen-a of said chapter, all relating to declination of automobile liability insurance and homeowner's insurance solely based on adverse credit reports generally; and requiring certain carriers to provide counseling and information to consumers if policies are rerated using credit scoring.

Be it enacted by the Legislature of West Virginia:

That section three, article six-b, chapter thirty-three of the code of West Virginia, one thousand nine hundred thirty-one, as amended, be amended and reenacted; and that section six, article seventeen-a of said chapter be amended and reenacted, all to read as follows:

ARTICLE 6B. DECLINATION OF AUTOMOBILE LIABILITY INSURANCE.

§33-6B-3. Declinations; prohibited reasons; credit scoring.

The declination of an application for a private passenger policy of automobile liability insurance by an insurer, agent or broker is prohibited if the declination is:

(a) Based upon the race, religion, nationality or ethnic group, of the applicant or named insured;

(b) Based solely upon the lawful occupation or profession of the applicant or named insured, unless the decision is for a business purpose that is not a mere pretext for unfair discrimination: Provided, That this provision does not apply to any insurer, agent or broker that limits its market to one lawful occupation or profession or to several related lawful occupations or professions;

(c) Based upon the principal location of the insured motor vehicle unless the decision is for a business purpose which is not a mere pretext for unfair discrimination;

(d) Based solely upon the age, sex or marital status of an applicant or an insured, except that this subsection does not prohibit rating differentials based on age, sex or marital status;

(e) Based upon the fact that the applicant has previously obtained insurance coverage with a substandard insurance carrier;

(f) Based upon the fact that the applicant has not previously been insured;

(g) Based upon the fact that the applicant did not have insurance coverage for a period of time prior to the application;

(h) Based upon the fact that the applicant or named insured previously obtained insurance coverage through a residual market insurance mechanism;

(i) Based upon the fact that another insurer previously declined to insure the applicant or terminated an existing policy in which the applicant was the named insured;

(j) Based solely upon an adverse credit report or adverse credit scoring: Provided, That any insurance carrier rerating for credit scoring purposes a new or renewal insurance policy shall:

(1) Maintain a toll free number for the applicant or insured to use to contact a trained insurance representative to provide information on how he or she may improve, amend and correct his or her rating; and

(2) Offer free professional counseling to an applicant or an insured regarding methods by which the applicant or insured may improve his or her rating.

Nothing in this section may be construed to prohibit an insurer, agent or broker from using legitimate, documented, underwriting data in making their own independent risk assessment of an applicant for insurance.

ARTICLE 17A. PROPERTY INSURANCE DECLINATION, TERMINATION AND DISCLOSURE.

§33-17A-6. Discriminatory terminations and declinations prohibited; credit scoring.

No insurer may decline to issue or terminate a policy of insurance subject to this article if the declination or termination is:
(a) Based upon the race, religion, nationality, ethnic group, age, sex or marital status of the applicant or named insured;
(b) Based solely upon the lawful occupation or profession of the applicant or named insured, unless the decision is for a business purpose that is not a mere pretext for unfair discrimination: Provided, That this provision does not apply to any insurer, agent or broker that limits its market to one lawful occupation or profession or to several related lawful occupations or professions;
(c) Based upon the age or location of the residence of the applicant or named insured unless the decision is for a business purpose that is not a mere pretext for unfair discrimination or unless the age or location materially affects the risk;
(d) Based upon the fact that another insurer previously declined to insure the applicant or terminated an existing policy in which the applicant was the named insured;
(e) Based upon the fact that the applicant or named insured previously obtained insurance coverage through a residual market insurance mechanism;
(f) Based upon the fact that the applicant has not previously been insured;
(g) Based upon the fact that the applicant did not have insurance coverage for a period of time prior to the application; or
(h) Based solely upon an adverse credit report or adverse credit scoring: Provided, That any insurance carrier rerating for credit scoring purposes a new or renewal insurance policy shall:
(1) Maintain a toll free number for the applicant or insured to use to contact a trained insurance representative to provide information on how he or she may improve, amend and correct regarding his or her rating; and
(2) Offer free professional counseling to an applicant or an insured regarding methods by which the applicant or insured may improve his or her rating.



NOTE: The purpose of this bill is to require automobile liability and homeowner's insurance carriers using credit scoring to set premiums to provide a toll free number for an applicant or an insured to obtain information regarding his or her rating and to provide free credit counseling to an applicant or an insured.

Strike-throughs indicate language that would be stricken from the present law, and underscoring indicates new language that would be added.