First Substitute H.B. 216

Representative David L. Hogue proposes the following substitute bill:

1 USE OF CREDIT RELATED INSTRUMENTS
2 2003 GENERAL SESSION
3 STATE OF UTAH
4 Sponsor: David L. Hogue
5 This act modifies the Insurance Code to eliminate certain exemptions relating to the use
6 of credit information in connection with motor vehicle insurance.
7 This act affects sections of Utah Code Annotated 1953 as follows:
8 AMENDS:
9 31A-22-320, as enacted by Chapter 221, Laws of Utah 2002
10 Be it enacted by the Legislature of the state of Utah:
11 Section 1. Section 31A-22-320 is amended to read:
12 31A-22-320. Use of credit information.
13 (1) For purposes of this section:
14 (a) "Credit information" means:
15 (i) a consumer report;
16 (ii) a credit score;
17 (iii) any information obtained by the insurer from a consumer report;
18 (iv) any part of a consumer report; or
19 (v) any part of a credit score.
20 (b) (i) Except as provided in Subsection (1)(b)(ii), "consumer report" is as defined in
21 15 U.S.C. 1681a.
22 (ii) "Consumer report" does not include:
23 (A) a motor vehicle record obtained from a state or an agency of a state; or
24 (B) any information regarding an applicant's or insured's insurance claim history.
25 (c) (i) "Credit score" means a numerical value or a categorization that is:

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

57 [(A) a reduction in rates paid by the insured for the motor vehicle related insurance
58 policy; or]
59 [(B) any other discount similar to the reduction in rates described in Subsection
60 (2)(b)(ii)(A).]
61 (3) In accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act, the
62 commissioner may make rules necessary to enforce this section.