Current through Register Vol. 46, No. 12, March 20, 2024
(a) An insurer shall not use credit
information to take an adverse action against a consumer unless, the insurer
obtains and uses a credit report issued, or an insurance score calculated, no
more than 90 days prior to the date the policy is first written.
(b)
(1) An
insurer shall not use credit information unless, at least once every 36 months,
upon the request of the consumer or the producer, the insurer shall
re-underwrite and re-rate the policy based upon a current credit report or
insurance score and shall make any necessary adjustments, including moving the
insured to the appropriate tier, effective as of the date of the report or
score. The re-underwriting and re-rating shall not result in a premium increase
for the insured.
(2) If upon
consideration of the current credit information, the insured is eligible for
placement in an affiliate of the insurer at a lower rate in accordance with the
affiliate's current underwriting rules and the insured was previously
ineligible for placement with that affiliate due to the prior credit
information, then the affiliate shall offer the insured a new policy with
substantially equivalent coverage. If the offer is accepted by the insured and
a new policy is issued, the affiliate may not exercise any right that it
otherwise may have under section 3425(b) to cancel the policy within the first
60 days other than for a reason specified in section 3425(c).
(c) Notwithstanding paragraph
(b)(1) of this section, an insurer may decline the request to obtain current
credit information for an insured because:
(1) the insurer had obtained a current credit
report within the last 36-month period;
(2) the insured is in the most
favorably-priced tier of the insurer or the most favorably priced company
within a group of affiliated insurers; or
(3) credit was not used for underwriting or
rating the insured when the policy was initially written.
(d) An insurer may obtain and use current
credit information upon renewal, in accordance with its underwriting guidelines
applied consistently to all insureds in a program of insurance provided that
such information may be used only to reduce the premium for the
insured.
