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First Substitute H.B. 110

Representative Peggy Wallace proposes the following substitute bill:





Sponsor: Peggy Wallace

             6      Ron Bigelow

             7      This act modifies the Insurance Code to regulate the use of certain credit information in
             8      making insurance decisions related to motor vehicle insurance.
             9      This act affects sections of Utah Code Annotated 1953 as follows:
             10      ENACTS:
             11          31A-22-320, Utah Code Annotated 1953
             12      Be it enacted by the Legislature of the state of Utah:
             13          Section 1. Section 31A-22-320 is enacted to read:
             14          31A-22-320. Use of credit information.
             15          (1) For purposes of this section:
             16          (a) "Credit information" means:
             17          (i) a consumer report;
             18          (ii) a credit score;
             19          (iii) any information obtained by the insurer from a consumer report;
             20          (iv) any part of a consumer report; or
             21          (v) any part of a credit score.
             22          (b) (i) Except as provided in Subsection (1)(b)(ii), "consumer report" is as defined in 15
             23      U.S.C. 1681.
             24          (ii) "Consumer report" does not include:
             25          (A) a motor vehicle record obtained from a state or an agency of a state; or

             26          (B) any information regarding an applicant's or insured's insurance claim history.
             27          (c) (i) "Credit score" means a numerical value or a categorization that is:
             28          (A) derived from information in a consumer report;
             29          (B) derived from a statistical tool or modeling system; and
             30          (C) developed to predict the likelihood of:
             31          (I) future insurance claims behavior; or
             32          (II) credit behavior.
             33          (ii) "Credit score" includes:
             34          (A) a risk predictor; or
             35          (B) a risk score.
             36          (iii) A numerical value or a categorization described in Subsection (1)(c)(i) is a credit score
             37      if it is developed to predict the behavior described in Subsection (1)(c)(i)(C) regardless of whether
             38      it is developed to predict other factors in addition to predicting the behavior described in
             39      Subsection (1)(c)(i)(C).
             40          (d) "Motor vehicle related insurance policy" means:
             41          (i) a motor vehicle liability policy;
             42          (ii) a policy that contains uninsured motorist coverage;
             43          (iii) a policy that contains underinsured motorist coverage;
             44          (iv) a policy that contains property damage coverage under this part; or
             45          (v) a policy that contains personal injury coverage under this part.
             46          (2) An insurer that issues a motor vehicle related insurance policy:
             47          (a) may not use credit information for the purpose of determining for the motor vehicle
             48      related insurance policy:
             49          (i) nonrenewal; or
             50          (ii) termination; and
             51          (b) if the conditions of Subsection (3) are met, may use credit information for the purpose
             52      of determining for the motor vehicle related insurance policy:
             53          (i) eligibility;
             54          (ii) underwriting; or
             55          (iii) rating.
             56          (3) (a) An insurer that issues a motor vehicle related insurance policy may use credit

             57      information as provided in Subsection (2)(b) only if:
             58          (i) in addition to the credit information, the insurer uses other criteria not related to credit
             59      in making a determination described in Subsection (2)(b); and
             60          (ii) the credit information is not the primary basis for the determination described in
             61      Subsection (2)(b).
             62          (b) For purposes of this Subsection (3), the commissioner shall by rule define under what
             63      circumstances use of credit information constitutes the primary basis for a determination described
             64      in Subsection (2)(b) in violation of this Subsection (3).
             65          (4) In accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act, the
             66      commissioner may make rules necessary to enforce this section.

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