HB2138 - 452R - House Bill Summary

House of Representatives

HB 2138

insurance underwriting; homeowners; credit history

Sponsors: Representative Carpenter; Kraft, Poelstra

X	Committee on Financial Institutions & Insurance
	Caucus and COW
	Third Read
	As Passed the House

HB 2138 prescribes that insurers shall not fail to renew or increase a homeowner's insurance policy based on the policyholder's credit history.

History

The use of insurance score models have become more frequently used by insurance companies. These models use information contained in a consumer's credit report (bill payments, number of accounts, length of credit history, and consumer debt), assign or weight the information in a certain category and determine a numeric score. This score is then used to determine what an applicant’s premium will be and is considered by insurers to be an accurate means to determine future risk. Concerns have arisen about the weight of the scoring models particularly in instances when information in the consumer report may be inaccurate. Additionally, long time policyholders have sought a better explanation about the application of scoring models, especially with regards to homeowners insurance. Currently there are no statutory provisions regarding the use of consumer information for insurance underwriting purposes. HB 2138 prescribes that insurers shall not fail to renew or increase a homeowner's insurance policy based on the policyholder's credit history.

Provisions

· Stipulates that insurers shall not fail to renew or increase a homeowner's insurance policy, based in whole or in part on the policyholder's credit history under two conditions:

· All financial obligations to the insurer must be satisfied; and

· The insured has not filed a claim in the previous three years.

· ---------- DOCUMENT FOOTER ---------

· 45th Legislature