§ 58‑36‑90. Prohibitions on using credit scoring to rate noncommercial private passengermotor vehicle and residential property insurance; exceptions.
(a) Definitions. Asused in this section:
(1) "Adverseaction" has the same meaning as in section 1681a(k) of the federal FairCredit Reporting Act and includes a denial or cancellation of, an increase inany charge for, or a reduction or other adverse or unfavorable change in theterms of coverage or amount of any insurance, existing or applied for, in connectionwith the underwriting of insurance.
(2) "Creditreport" means any written, oral, or other communication of any informationby a consumer reporting agency that bears on a consumer's credit worthiness,credit standing, or credit capacity. Credit report does not include accident ortraffic violation records as maintained by the North Carolina Division of MotorVehicles or any other law enforcement agency, a property loss report or claimshistory that does not include information that bears on a consumer's creditworthiness, credit standing, or credit capacity, or any report containinginformation solely as to transactions or experiences between the consumer andthe person making the report.
(3) "Creditscore" means a score that is derived by utilizing data from anindividual's credit report in an algorithm, computer program, model, or otherprocess that reduces the data to a number or rating.
(4) "Noncommercialprivate passenger motor vehicle" means a "private passenger motorvehicle," as defined by G.S. 58‑40‑10, that is neither insuredunder a commercial policy nor used for commercial purposes.
(5) "Privatepassenger motor vehicle" has the same meaning as set forth in G.S. 58‑40‑10.
(6) "Residentialproperty" means real property with not more than four housing unitslocated in this State, the contents thereof and valuable interest therein, andinsurance coverage written in connection with the sale of that property. Italso includes mobile homes, modular homes, townhomes, condominiums, andinsurance on contents of apartments and rental property used for residentialpurposes.
(b) Prohibitions;Exceptions. In the rating and underwriting of noncommercial private passengermotor vehicle and residential property insurance coverage, insurers shall notuse credit scoring as the sole basis for terminating an existing policy or anycoverage in an existing policy or subjecting a policy to consent to rate asspecified in G.S. 58‑36‑30(b) without consideration of any otherrisk factors, but insurers may use credit scoring as the sole basis fordiscounting rates. For purposes of this subsection only, "existingpolicy" means a policy that has been in effect for more than 60 days.
(c) Notification. Ifa credit report is used in conjunction with other criteria to take an adverseaction, the insurer shall provide the applicant or policyholder with writtennotice of the action taken, in a form approved by the Commissioner. Thenotification shall include, in easily understandable language:
(1) The specific reasonfor the adverse action and, if the adverse action was based upon a creditscore, a description of the factors that were the primary influence on thescore.
(2) The name, address,and toll‑free telephone number of the credit bureau that provided theinsurer with the credit‑based information.
(3) The fact that theconsumer has the right to obtain a free copy of the consumer's credit reportfrom the appropriate credit bureau.
(4) The fact that theconsumer has the right to challenge information contained in the consumer'scredit report.
(d) Disputed CreditReport Information. If it is determined through the dispute resolutionprocess set forth in the federal Fair Credit Reporting Act, 15 U.S.C. §1681i(a)(5), that the credit information of a current insured was incorrect orincomplete and if the insurer receives notice of such determination from eitherthe consumer reporting agency or from the insured, the insurer shall re‑underwriteor re‑rate the consumer within 30 days of receiving the notice. After re‑underwriting or re‑rating the insured, the insurer shall make anyadjustments necessary, consistent with its underwriting guidelines. If aninsurer determines the insured has overpaid premium, the insurer shall refundto the insured the amount of overpayment calculated back to the shorter ofeither the last 12 months of coverage or the actual policy period.
(e) Indemnification. An insurer shall indemnify, defend, and hold agents harmless from and againstall liability, fees, and costs arising out of or relating to the actions,errors, or omissions of an agent who obtains or uses credit information orcredit scores for an insurer, provided the agent follows the instructions orprocedures established by the insurer and complies with any applicable law orregulation. Nothing in this subsection shall be construed to provide a consumeror other insured with a cause of action that does not exist in the absence ofthis subsection.
(f) Filing. Insurersthat use credit scores to underwrite and rate risks shall file their scoringmodels, or other scoring processes, with the Department. A filing that includescredit scoring may include loss experience justifying the applicable surchargeor credit. A filer may request that its credit score data be considered a tradesecret and may designate parts of its filings accordingly. (2003‑216, s. 1; 2004‑199,ss. 20(f), 20(g).)
§ 58‑36‑90. Prohibitions on using credit scoring to rate noncommercial private passengermotor vehicle and residential property insurance; exceptions.
(a) Definitions. Asused in this section:
(1) "Adverseaction" has the same meaning as in section 1681a(k) of the federal FairCredit Reporting Act and includes a denial or cancellation of, an increase inany charge for, or a reduction or other adverse or unfavorable change in theterms of coverage or amount of any insurance, existing or applied for, in connectionwith the underwriting of insurance.
(2) "Creditreport" means any written, oral, or other communication of any informationby a consumer reporting agency that bears on a consumer's credit worthiness,credit standing, or credit capacity. Credit report does not include accident ortraffic violation records as maintained by the North Carolina Division of MotorVehicles or any other law enforcement agency, a property loss report or claimshistory that does not include information that bears on a consumer's creditworthiness, credit standing, or credit capacity, or any report containinginformation solely as to transactions or experiences between the consumer andthe person making the report.
(3) "Creditscore" means a score that is derived by utilizing data from anindividual's credit report in an algorithm, computer program, model, or otherprocess that reduces the data to a number or rating.
(4) "Noncommercialprivate passenger motor vehicle" means a "private passenger motorvehicle," as defined by G.S. 58‑40‑10, that is neither insuredunder a commercial policy nor used for commercial purposes.
(5) "Privatepassenger motor vehicle" has the same meaning as set forth in G.S. 58‑40‑10.
(6) "Residentialproperty" means real property with not more than four housing unitslocated in this State, the contents thereof and valuable interest therein, andinsurance coverage written in connection with the sale of that property. Italso includes mobile homes, modular homes, townhomes, condominiums, andinsurance on contents of apartments and rental property used for residentialpurposes.
(b) Prohibitions;Exceptions. In the rating and underwriting of noncommercial private passengermotor vehicle and residential property insurance coverage, insurers shall notuse credit scoring as the sole basis for terminating an existing policy or anycoverage in an existing policy or subjecting a policy to consent to rate asspecified in G.S. 58‑36‑30(b) without consideration of any otherrisk factors, but insurers may use credit scoring as the sole basis fordiscounting rates. For purposes of this subsection only, "existingpolicy" means a policy that has been in effect for more than 60 days.
(c) Notification. Ifa credit report is used in conjunction with other criteria to take an adverseaction, the insurer shall provide the applicant or policyholder with writtennotice of the action taken, in a form approved by the Commissioner. Thenotification shall include, in easily understandable language:
(1) The specific reasonfor the adverse action and, if the adverse action was based upon a creditscore, a description of the factors that were the primary influence on thescore.
(2) The name, address,and toll‑free telephone number of the credit bureau that provided theinsurer with the credit‑based information.
(3) The fact that theconsumer has the right to obtain a free copy of the consumer's credit reportfrom the appropriate credit bureau.
(4) The fact that theconsumer has the right to challenge information contained in the consumer'scredit report.
(d) Disputed CreditReport Information. If it is determined through the dispute resolutionprocess set forth in the federal Fair Credit Reporting Act, 15 U.S.C. §1681i(a)(5), that the credit information of a current insured was incorrect orincomplete and if the insurer receives notice of such determination from eitherthe consumer reporting agency or from the insured, the insurer shall re‑underwriteor re‑rate the consumer within 30 days of receiving the notice. After re‑underwriting or re‑rating the insured, the insurer shall make anyadjustments necessary, consistent with its underwriting guidelines. If aninsurer determines the insured has overpaid premium, the insurer shall refundto the insured the amount of overpayment calculated back to the shorter ofeither the last 12 months of coverage or the actual policy period.
(e) Indemnification. An insurer shall indemnify, defend, and hold agents harmless from and againstall liability, fees, and costs arising out of or relating to the actions,errors, or omissions of an agent who obtains or uses credit information orcredit scores for an insurer, provided the agent follows the instructions orprocedures established by the insurer and complies with any applicable law orregulation. Nothing in this subsection shall be construed to provide a consumeror other insured with a cause of action that does not exist in the absence ofthis subsection.
(f) Filing. Insurersthat use credit scores to underwrite and rate risks shall file their scoringmodels, or other scoring processes, with the Department. A filing that includescredit scoring may include loss experience justifying the applicable surchargeor credit. A filer may request that its credit score data be considered a tradesecret and may designate parts of its filings accordingly. (2003‑216, s. 1; 2004‑199,ss. 20(f), 20(g).)
§ 58‑36‑90. Prohibitions on using credit scoring to rate noncommercial private passengermotor vehicle and residential property insurance; exceptions.
(a) Definitions. Asused in this section:
(1) "Adverseaction" has the same meaning as in section 1681a(k) of the federal FairCredit Reporting Act and includes a denial or cancellation of, an increase inany charge for, or a reduction or other adverse or unfavorable change in theterms of coverage or amount of any insurance, existing or applied for, in connectionwith the underwriting of insurance.
(2) "Creditreport" means any written, oral, or other communication of any informationby a consumer reporting agency that bears on a consumer's credit worthiness,credit standing, or credit capacity. Credit report does not include accident ortraffic violation records as maintained by the North Carolina Division of MotorVehicles or any other law enforcement agency, a property loss report or claimshistory that does not include information that bears on a consumer's creditworthiness, credit standing, or credit capacity, or any report containinginformation solely as to transactions or experiences between the consumer andthe person making the report.
(3) "Creditscore" means a score that is derived by utilizing data from anindividual's credit report in an algorithm, computer program, model, or otherprocess that reduces the data to a number or rating.
(4) "Noncommercialprivate passenger motor vehicle" means a "private passenger motorvehicle," as defined by G.S. 58‑40‑10, that is neither insuredunder a commercial policy nor used for commercial purposes.
(5) "Privatepassenger motor vehicle" has the same meaning as set forth in G.S. 58‑40‑10.
(6) "Residentialproperty" means real property with not more than four housing unitslocated in this State, the contents thereof and valuable interest therein, andinsurance coverage written in connection with the sale of that property. Italso includes mobile homes, modular homes, townhomes, condominiums, andinsurance on contents of apartments and rental property used for residentialpurposes.
(b) Prohibitions;Exceptions. In the rating and underwriting of noncommercial private passengermotor vehicle and residential property insurance coverage, insurers shall notuse credit scoring as the sole basis for terminating an existing policy or anycoverage in an existing policy or subjecting a policy to consent to rate asspecified in G.S. 58‑36‑30(b) without consideration of any otherrisk factors, but insurers may use credit scoring as the sole basis fordiscounting rates. For purposes of this subsection only, "existingpolicy" means a policy that has been in effect for more than 60 days.
(c) Notification. Ifa credit report is used in conjunction with other criteria to take an adverseaction, the insurer shall provide the applicant or policyholder with writtennotice of the action taken, in a form approved by the Commissioner. Thenotification shall include, in easily understandable language:
(1) The specific reasonfor the adverse action and, if the adverse action was based upon a creditscore, a description of the factors that were the primary influence on thescore.
(2) The name, address,and toll‑free telephone number of the credit bureau that provided theinsurer with the credit‑based information.
(3) The fact that theconsumer has the right to obtain a free copy of the consumer's credit reportfrom the appropriate credit bureau.
(4) The fact that theconsumer has the right to challenge information contained in the consumer'scredit report.
(d) Disputed CreditReport Information. If it is determined through the dispute resolutionprocess set forth in the federal Fair Credit Reporting Act, 15 U.S.C. §1681i(a)(5), that the credit information of a current insured was incorrect orincomplete and if the insurer receives notice of such determination from eitherthe consumer reporting agency or from the insured, the insurer shall re‑underwriteor re‑rate the consumer within 30 days of receiving the notice. After re‑underwriting or re‑rating the insured, the insurer shall make anyadjustments necessary, consistent with its underwriting guidelines. If aninsurer determines the insured has overpaid premium, the insurer shall refundto the insured the amount of overpayment calculated back to the shorter ofeither the last 12 months of coverage or the actual policy period.
(e) Indemnification. An insurer shall indemnify, defend, and hold agents harmless from and againstall liability, fees, and costs arising out of or relating to the actions,errors, or omissions of an agent who obtains or uses credit information orcredit scores for an insurer, provided the agent follows the instructions orprocedures established by the insurer and complies with any applicable law orregulation. Nothing in this subsection shall be construed to provide a consumeror other insured with a cause of action that does not exist in the absence ofthis subsection.
(f) Filing. Insurersthat use credit scores to underwrite and rate risks shall file their scoringmodels, or other scoring processes, with the Department. A filing that includescredit scoring may include loss experience justifying the applicable surchargeor credit. A filer may request that its credit score data be considered a tradesecret and may designate parts of its filings accordingly. (2003‑216, s. 1; 2004‑199,ss. 20(f), 20(g).)
