- Introduced -

SB 1215 - This act establishes minimum standards for the collection and use of credit information in the insurance underwriting process and requires insurers to provide their standards in written form to the Department of Insurance and to apply those standards uniformly to all applicants and insureds.

This act requires insurers to file with the Department any documentation necessary to explain the formulas and methodology used by the insurer to incorporate credit information into their underwriting processes. This act requires insurers who cancel or refuse to renew a policy to provide the insured with its reasons for its decision. This act authorizes the Department to collect data regarding the correlation between credit rating and losses. This act permits the Department to review denials of insurance that are alleged to be in violation of the provisions of this act. This act allows insureds to request reevaluation of their insurance rating whenever an insurer uses credit information in its underwriting process.

This act requires that insurance policies include the insurer's termination provisions. This act prohibits insurers from terminating a policy because of race, color, creed, national origin, ancestry, gender, sexual orientation, or marital status. This act also prohibits insurers from terminating a policy because of age, disability, or geographic location, unless the action is the result of the application of sound underwriting and actuarial principles. This act prohibits insurers from canceling a policy because of the insured's "intentional concealment of facts" after 180 days or one policy period. This act requires insurers to provide a full year's notice to the Department of their intent to withdraw an entire line of insurance from the market. This act requires insurers to provide notice 10, 30 or 45 days prior to the cancellation of a policy, depending on the how long the policy has been in effect and the reasons for cancellation. This act requires prior notice of 45 days for non-renewal of a policy. If the insurer fails to comply with the notice requirements, the policy shall be extended on the same terms and conditions for another policy term.

If a policy is canceled and similar coverage is available through a residual market mechanism, the insurer shall notify the insured of possible eligibility in such a market.

This act establishes a procedure for appealing to the Department an improper termination of coverage. The act requires an insured to file a written appeal with the Department at least 25 days before the effective date of the termination of coverage. The Department can order that coverage be continued, pending a hearing and resolution of the appeal. This act allows the department to fine insurers up to $250,000 (aggregate penalty) for conscious disregard of the law prohibiting improper termination of an insurance policy.

STEPHEN WITTE