S.B. 171

1

HOMEOWNER'S INSURANCE
2 1997 GENERAL SESSION
3 STATE OF UTAH
4 Sponsor: Millie M. Peterson
5 AN ACT RELATING TO INSURANCE; REQUIRING AN INSURER TO ADOPT CERTAIN
6 INTERNAL PROCEDURES IF IT USES CONSUMER REPORTS IN UNDERWRITING
7 HOMEOWNER'S INSURANCE.
8 This act affects sections of Utah Code Annotated 1953 as follows:
9 ENACTS:
10 31A-22-1307, Utah Code Annotated 1953
11 Be it enacted by the Legislature of the state of Utah:
12 Section 1. Section 31A-22-1307 is enacted to read:
13 31A-22-1307. Use of consumer reports by residential dwelling liability insurers.
14 (1) An insurer who uses consumer reports in connection with the underwriting of
15 residential dwelling liability insurance shall establish and adhere to written procedures that:
16 (a) identify the circumstances under which the insurer may request and the manner in
17 which it will use consumer reports in its underwriting decisions;
18 (b) provide prior notice of the possible or intended use of a consumer report to an applicant
19 for a residential liability insurance policy; and
20 (c) ensure compliance with the Consumer Credit Reporting Act, 15 U.S.C. Sec. 1681,
21 including the duties that arise from taking adverse action based on information contained in a
22 consumer report.
23 (2) An insurer that requests or uses a consumer report in connection with an application
24 for a residential dwelling liability insurance policy shall maintain evidence of its compliance with
25 the written procedures established by the insurer under Subsection (1).
26 (3) An insurer shall submit to the commissioner, upon request, evidence of compliance
27 maintained in accordance with Subsection (2).

1 (4) As used in this section, the terms "consumer report" and "adverse action" are defined
2 in 15 U.S.C. Sec. 1681a.




Legislative Review Note
as of 2-12-97 8:35 AM

This bill raises the following constitutional or statutory concerns:


The Fair Credit Reporting Act allows "a consumer reporting agency to furnish a consumer
report to a person which it has reason to believe intends to use the information in connection
with the underwriting of insurance involving the consumer." 15 U.S.C. Sec. 1681b(a). The
state may require a homeowner's insurance company to adopt internal procedures for the use of
consumer reports in underwriting insurance to the extent it is not inconsistent with Section
1681(b) or other provision of the Fair Credit Reporting Act.

Office of Legislative Research and General Counsel

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