HB 650 -- Use of Credit Scores by Insurance Companies

Sponsor:  Hughes

This bill changes the laws regarding the use of credit
information when underwriting insurance contracts.  In its main
provisions, the bill:

(1)  Revises the definition of "adverse action" to have the same
meaning as federal law including cancellation, denial, and
nonrenewal of personal insurance coverage and creating an
unfavorable change in the terms of coverage, including charging
higher premiums;

(2)  Changes the definition of "contract" as it relates to
automobile insurance policies;

(3)  Prohibits insurers from using a credit score derived from
using a person's income, gender, address, heritage, marital
status, or education.  The absence of credit information or an
inability to calculate a score cannot be used when underwriting
insurance;

(4)  Prohibits insurers from using credit information to
underwrite a policy after it has been in force for 36 months,
unless there is a substantial change in the risk based on other
rating factors;

(5)  Allows the consumer, at his or her annual renewal, to
request the insurer re-underwrite the policy based on a current
credit report;

(6)  Prohibits insurers and credit reporting agencies from using
as a negative factor in underwriting:

(a)  Credit inquiries not initiated by the insured;

(b)  Medical collection accounts;

(c)  Multiple credit inquiries;

(d)  Absence of credit history;

(e)  Use of certain credit cards; or

(f)  Consumer's total available line of credit; and

(7)  Requires insurers to file their credit scoring models with
the Department of Insurance, Financial Institutions, and
Professional Registration.

Missouri House of Representatives
94th General Assembly, 1st Regular Session
Last Updated July 25, 2007 at 11:20 am