1.1 	A bill for an act
1.2 	relating to insurance; regulating the use of credit scores and other credit 
1.3 	information in insurance underwriting;amending Minnesota Statutes 2008, 
1.4 	sections 72A.20, subdivision 36; 72A.499, subdivision 1; 72A.501, subdivision 2.
1.5 	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

1.6 	Section 1. Minnesota Statutes 2008, section 72A.20, subdivision 36, is amended to 
1.7 	read:
1.8 		Subd. 36.LimitationsProhibition on the use of credit information. (a) No 
1.9 	insurer or group of affiliated insurers may use credit information, including a credit 
1.10 	reporting product known as a "credit score," to set rates for or reject, cancel, or nonrenew 
1.11 	a policy of private passenger motor vehicle insurance as defined under section 65B.01or,
1.12 	a policy of homeowner's insurance as defined under section 65A.27, for any person in 
1.13 	whole or in part on the basis of credit information, including a credit reporting product 
1.14 	known as a "credit score" or "insurance score," without consideration and inclusion of any 
1.15 	other applicable underwriting factor or a health plan as defined under section 62A.011, 
1.16 	subdivision 3. This subdivision does not apply with respect to credit information directly 
1.17 	related to payment history for the type of insurance policy or health plan at issue. For 
1.18 	purposes of this subdivision, "insurer" includes health carriers as defined under section 
1.19 	62A.011, subdivision 2.
1.20 	(b) If credit information, credit scoring, or insurance scoring is to be used in 
1.21 	underwriting, the insurer must disclose to the consumer that credit information will be 
1.22 	obtained and used as part of the insurance underwriting process.
1.23 	(c) Insurance inquiries and non-consumer-initiated inquiries must not be used as part 
1.24 	of the credit scoring or insurance scoring process.
2.1 	(d) If a credit score, insurance score, or other credit information relating to a 
2.2 	consumer, with respect to the types of insurance referred to in paragraph (a), is adversely 
2.3 	impacted or cannot be generated because of the absence of a credit history, the insurer 
2.4 	must exclude the use of credit as a factor in the decision to reject, cancel, or nonrenew.
2.5 	(e) Insurers must upon the request of a policyholder reevaluate the policyholder's 
2.6 	score. Any change in premium resulting from the reevaluation must be effective upon 
2.7 	the renewal of the policy. An insurer is not required to reevaluate a policyholder's score 
2.8 	pursuant to this paragraph more than twice in any given calendar year.
2.9 	(f) Insurers must upon request of the applicant or policyholder provide reasonable 
2.10 	underwriting exceptions based upon prior credit histories for persons whose credit 
2.11 	information is unduly influenced by expenses related to a catastrophic injury or illness, 
2.12 	temporary loss of employment, or the death of an immediate family member. The insurer 
2.13 	may require reasonable documentation of these events prior to granting an exception.
2.14 	(g) A credit scoring or insurance scoring methodology must not be used by an 
2.15 	insurer if the credit scoring or insurance scoring methodology incorporates the gender, 
2.16 	race, nationality, or religion of an insured or applicant.
2.17 	(h) Insurers that employ a credit scoring or insurance scoring system in underwriting 
2.18 	of coverage described in paragraph (a) must have on file with the commissioner:
2.19 	(1) the insurer's credit scoring or insurance scoring methodology; and
2.20 	(2) information that supports the insurer's use of a credit score or insurance score as 
2.21 	an underwriting criterion.
2.22 	(i) Insurers described in paragraph (g) shall file the required information with the 
2.23 	commissioner within 120 days of August 1, 2002, or prior to implementation of a credit 
2.24 	scoring or insurance scoring system by the insurer, if that date is later.
2.25 	(j) Information provided by, or on behalf of, an insurer to the commissioner under 
2.26 	this subdivision is trade secret information under section 13.37.

2.27 	EFFECTIVE DATE. This section is effective the day following final enactment.

2.28 	Sec. 2. Minnesota Statutes 2008, section 72A.499, subdivision 1, is amended to read:
2.29 		Subdivision 1.Notice and information. (a) In the event of an adverse underwriting 
2.30 	decision, the insurer or insurance agent responsible for the decision shall provide in 
2.31 	writing to the applicant, policyholder, or individual proposed for coverage:
2.32 	(1) the specific reason or reasons for the adverse underwriting decision, a summary 
2.33 	of the person's rights under sections  72A.497 and  72A.498, and that upon request the 
2.34 	person may receive the specific items of personal information that support those reasons 
2.35 	and the specific sources of the information; or 
3.1 	(2) the specific reason or reasons for the adverse underwriting decision, the specific 
3.2 	items of personal and privileged information that support those reasons, the names and 
3.3 	addresses of the sources that supplied the specific items of information specified, and a 
3.4 	summary of the rights established under sections  72A.497 and  72A.498. 
3.5 	(b) In addition to the requirements of paragraph (a), if the adverse underwriting 
3.6 	decision is either solely or partially based upon a report of creditworthiness, credit 
3.7 	standing, or credit capacity that an insurer receives from a consumer reporting agency, 
3.8 	the insurer or insurance agent responsible for the decision shall provide in writing to the 
3.9 	applicant, policyholder, or individual proposed for coverage the primary reason or reasons 
3.10 	for the credit score or other credit based information used by the insurer in the insurer's 
3.11 	adverse underwriting decision.

3.12 	EFFECTIVE DATE. This section is effective the day following final enactment.

3.13 	Sec. 3. Minnesota Statutes 2008, section 72A.501, subdivision 2, is amended to read:
3.14 		Subd. 2.Application. (a) If the authorization is signed to collect information in 
3.15 	connection with an application for a property and casualty insurance policy, a policy 
3.16 	reinstatement, or a request for a change in benefits, the authorization is valid as long as 
3.17 	the individual is continually insured with the insurer. At each renewal of the policy, the 
3.18 	insurer must notify the insured in writing of the contents of the authorization and that the 
3.19 	authorization remains in effect unless revoked.
3.20 	(b) If the authorization is signed to collect information in connection with an 
3.21 	application for a life, disability, and health insurance policy or contract, reinstatement, 
3.22 	or request for change in benefits, the authorization is valid as long as the individual is 
3.23 	continually insured with the insurer. At each renewal of the policy, the insurer must 
3.24 	notify the insured in writing of the contents of the authorization and that the authorization 
3.25 	remains in effect unless revoked.
3.26 	(c) This section and section 72A.502, subdivisions 1 and 12, do not apply to the 
3.27 	collection and use of a numeric product referred to as an insurance score or credit score 
3.28 	that is used by a licensed insurance agent or insurer exclusively for the purpose of 
3.29 	underwriting or rating an insurance policy, if the agent or insurer informs the policyholder 
3.30 	or prospective policyholder requesting the insurance coverage that an insurance score or 
3.31 	credit score will be obtained for the purpose of underwriting or rating the policy.

3.32 	EFFECTIVE DATE. This section is effective the day following final enactment.