History: L. 2003, ch. 88, § 2; July 1.
(b) This act shall apply to all personal insurance policies either written to be effective or renewed on or after January 1, 2004.
History: L. 2003, ch. 88, § 3; July 1.
(a) "Adverse action" means any of the following in connection with the underwriting of personal insurance:
(1) A denial or cancellation of coverage;
(2) anything other than the best possible rate; or
(3) a reduction or other adverse or unfavorable change in the terms of coverage of any insurance regardless of whether such insurance is in existence or has been applied for.
(b) "Affiliate" means any company that controls, is controlled by, or is under common control with another company.
(c) "Agent" shall have the meaning ascribed to it in subsection (k) of K.S.A. 2009 Supp. 40-4902, and amendments thereto, unless the context requires otherwise.
(d) "Applicant" means an individual who has applied to an insurer to be covered by a personal insurance policy.
(e) "Commissioner" means the commissioner of insurance and any authorized designee of the commissioner.
(f) "Consumer" means an insured whose credit information is used or whose insurance score is calculated in the underwriting or rating of a personal insurance policy. "Consumer" also includes an applicant for a personal insurance policy.
(g) "Consumer reporting agency" means any person which, for monetary fees, dues, or on a cooperative nonprofit basis, regularly engages, in whole or in part, in the practice of assembling or evaluating consumer credit information or other information on consumers for the purpose of furnishing consumer reports to third parties.
(h) "Credit information" means any credit related information derived from a credit report, found on a credit report itself, or provided on an application for personal insurance. Credit information shall not include any information which is not credit related, regardless of whether such information is contained in a credit report or in an application or is used to calculate an insurance score.
(i) "Credit report" means any written, oral, or other communication of information by a consumer reporting agency bearing on a consumer's credit worthiness, credit standing or credit capacity which is used or expected to be used or collected in whole or in part for the purpose of serving as a factor to determine personal insurance premiums, eligibility for coverage, or tier placement.
(j) "Department" means the insurance department established by K.S.A. 40-102 and amendments thereto.
(k) "Insurance score" means a number or rating that is derived from an algorithm, computer application, model, or other process that is based, in whole or in part, on credit information for the purposes of predicting the future insurance loss exposure of an individual applicant or insured.
(l) "Personal insurance" means private passenger automobile, homeowners, motorcycle, mobile homeowners and non-commercial dwelling fire insurance policies and boat, personal water craft, snowmobile and recreational vehicle policies. For the strict purposes of this act, personal insurance shall also include individually underwritten policies of farmowners.
History: L. 2003, ch. 88, § 4; July 1.
(a) Use an insurance score that is calculated using income, address, zip code, race, religion, color, sex, disability, national origin, ancestry or marital status of the consumer as a factor.
(b) Without consideration of any other applicable underwriting factor independent of credit information and not expressly prohibited by subsection (a), refuse to quote, deny, cancel or refuse to renew any policy of personal insurance solely on the basis of credit information.
(c) Without consideration of any other applicable factor independent of credit information, base an insured's renewal rates for personal insurance solely upon credit information.
(d) Without consideration of any other applicable factor independent of credit information, take an adverse action against a consumer solely because such consumer does not have a credit card account.
(e) Consider an absence of credit information or an inability to calculate an insurance score in underwriting or rating personal insurance, unless the insurer does one of the following:
(1) Treat the consumer as if the applicant or insured had neutral credit information, as defined by the insurer; or
(2) exclude the use of credit information as a factor and use only other underwriting criteria.
(f) Take an adverse action against a consumer based on credit information, unless an insurer obtains and uses a credit report issued or an insurance score calculated within 90 days from the date the personal insurance policy is first written or notice of renewal is issued.
(g) (1) Except as provided in paragraphs (2) and (3), use credit information unless not later than every 36 months following the last time that the insurer obtained current credit information for the insured, the insurer recalculates the insurance score or obtains an updated credit report.
(2) The insurer shall:
(A) Re-underwrite and re-rate the consumer's personal insurance policy, at the annual renewal of such policy, based upon a current credit report or insurance score for such consumer, if requested by the consumer. Such consumer's current credit report or insurance score shall be used if the result of the re-underwrite and re-rate reduces the consumer's rate. Such consumer's current credit report or insurance score shall not be used to increase the consumer's rate. The insurer shall not be found to be in violation of rate filings by adjusting an insured's rate in accordance with this subparagraph. Nothing in this subparagraph shall require an insurer to recalculate a consumer's insurance score or obtain the updated credit report of a consumer more frequently than once in a twelve-month period.
(B) Have the discretion to obtain current credit information upon any renewal before the 36 months, if consistent with such insurer's underwriting guidelines.
(3) No insurer shall be required to obtain current credit information for an insured, if:
(A) The insured is in the most favorably-priced tier of the insurer, within a group of affiliated insurers. However, the insurer shall have the discretion to order such report, if consistent with such insurer's underwriting guidelines;
(B) credit was not used for underwriting or rating such insured when the policy was initially written. However, the insurer shall have the discretion to use credit for underwriting or rating such insured upon renewal, if consistent with such insurer's underwriting guidelines; or
(C) The insurer re-evaluates the insured beginning no later than 36 months after inception and thereafter based upon other underwriting or rating factors, excluding credit information.
(h) Use any of the following as a negative factor against a consumer in any insurance scoring methodology or in reviewing credit information for the purpose of underwriting or rating a policy of personal insurance:
(1) Any credit inquiry not initiated by the consumer or any inquiry requested by the consumer for such consumer's own credit information;
(2) any inquiry relating to insurance coverage, if so identified on a consumer's credit report;
(3) any collection account with a medical industry code, if so identified on the consumer's credit report; or
(4) any additional lender inquiry beyond the first such inquiry related to the same loan purpose, if coded by the consumer reporting agency on the consumer's credit report as being from the given loan industry and made within 30 days of one another.
History: L. 2003, ch. 88, § 5; July 1.
(b) If an insurer determines that the insured has overpaid the premium, the insurer shall refund to the insured the amount of overpayment calculated back to the shorter of either the last 12 months of coverage or the actual policy period.
History: L. 2003, ch. 88, § 6; July 1.
History: L. 2003, ch. 88, § 7; July 1.
(1) An adverse action has been taken, in accordance with the requirements of the federal fair credit reporting act as set forth in, 15 USC 1681m(a); and
(2) explains the reason for such adverse action.
(b) Each reason must be provided in sufficiently clear and specific language so that a person can identify the basis for the insurer's decision to take such adverse action. An insurer shall provide a procedure whereby a consumer may review an adverse action based on credit information. Such procedure shall be consistent with the provisions of K.S.A. 40-2,112 and amendments thereto. The insurer and the insurer's agent shall be immune from any action arising from information provided to the insured through such process. The insurer shall not be found in violation of rate filings by adjusting an insured's rate in such a manner.
(c) The use of generalized terms such as "poor credit history," "poor credit rating," or "poor insurance score" shall be deemed not to comply with requirements of this section.
History: L. 2003, ch. 88, § 8; July 1.
(b) Except for the procedure required by paragraph (b) of K.S.A. 2009 Supp. 40-5107, and amendments thereto, any filing relating to insurance scoring models or other insurance scoring processes shall be considered to be a trade secret and confidential under the open records act.
History: L. 2003, ch. 88, § 9; July 1.
(b) The commissioner shall report to the president and minority leader of the senate and the speaker and minority leader of the house of representatives by January 26, 2005, on issues relating to the use of credit history in the underwriting and rating of personal insurance and the implementation of this act.
History: L. 2003, ch. 88, § 10; July 1.
(b) The provisions of subsection (a) shall not be available whenever the agent fails to:
(1) Follow the instructions of or procedures established by the insurer; and
(2) comply with any applicable law or regulation.
(c) Nothing in this section shall be construed to provide a consumer or other insured with a cause of action that does not exist in the absence of this section.
History: L. 2003, ch. 88, § 11; July 1.
(1) The expiration date of an insurance policy or any other information that may identify any time period during which a consumer's insurance may expire; and
(2) the terms and conditions of the consumer's insurance coverage.
(b) The restrictions provided in subsection (a) of this section do not apply to:
(1) Any data or list the consumer reporting agency supplies to the insurance agent from whom information was received;
(2) the insurer for whom such agent acted; or
(3) such insurer's affiliates or holding companies.
(c) Nothing in this section shall be construed to prohibit or restrict any insurer from obtaining a claims history report or a motor vehicle report.
History: L. 2003, ch. 88, § 12; July 1.
History: L. 2003, ch. 88, § 13; July 1.
History: L. 2003, ch. 88, § 14; July 1.
(b) If any provision of this act or the application thereof to any person or circumstance is held invalid, the invalidity does not affect other provisions or applications of the act which can be given effect without the invalid provision or application, and to this end the provisions of this act are severable.
History: L. 2003, ch. 88, § 15; July 1.