I 
108TH CONGRESS 
1ST SESSION H. R. 1473
To amend the Fair Credit Reporting Act to provide disclosures of credit-
based insurance scoring information by insurers and credit reporting 
agencies, and for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
MARCH 27, 2003
Mr. GUTIERREZ introduced the following bill; which was referred to the 
Committee on Financial Services 
A BILL 
To amend the Fair Credit Reporting Act to provide disclo-
sures of credit-based insurance scoring information by 
insurers and credit reporting agencies, and for other 
purposes.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Insurance Credit Score 
Disclosure and Reporting Act’’. 
SEC. 2. FINDINGS AND PURPOSES. 
(a) FINDINGS.—The Congress finds as follows:
(1) According to the Insurance Information In-
stitute, 90 percent of property insurers now use in-
surance credit scoring in some way in their under-
writing decisions. 
(2) According to Consumer Reports, 70 percent 
of consumer reports have some kind of error and 29 
percent have at least 1 major error. 
(3) Since insurance credit scores are based on 
credit bureau data, the accuracy of the data is es-
sential to achieving accurate scores. 
(4) No insurance credit scoring modeling com-
pany has been able to identify the exact relationship 
between credit characteristics and loss ratios. 
(5) In January 2002, the Florida Task Force 
on the Use of Credit Reports in Underwriting Auto-
mobile and Homeowners Insurance concluded that 
the use of consumer reports has a negative impact 
on young people, minorities and people with low in-
comes. 
(6) The Fair Credit Reporting Act requires that 
insurers disclose the specific credit criteria used to 
raise rates or to render a consumer ineligible for a 
discounted premium. 
(7) Corporate research conducted by Fair, Isaac 
& Company found that residents of ZIP codes with
high minority populations scored substantially lower 
than residents than residents of other ZIP codes. 
(b) PURPOSES.—The purposes of this Act are as fol-
lows: 
(1) To protect insurance applicants and policy-
holders from insurers taking adverse action regard-
ing insurance coverage and premiums based solely 
on credit history or insurance credit score. 
(2) To require insurers to disclose the use of in-
surance credit scoring to insurance applicants and 
policyholders prior to original application and to dis-
close the insurance credit scoring criteria used by in-
surers to assess risk of applicant. 
(3) To enhance the availability and affordability 
of insurance products and services to individuals and 
small businesses of all economic circumstances and 
in all geographic areas. 
(4) To facilitate the enforcement of Federal and 
State laws that prohibit illegally discriminatory in-
surance practices. 
SEC. 3. ESTABLISHMENT OF GENERAL REQUIREMENTS. 
(a) DISCLOSURE OF USE OF INSURANCE CREDIT 
SCORE AND CONSUMER REPORT.—An insurer who uses, 
or may use, a consumer report or insurance credit score 
as a factor in underwriting an insurance application or
policy in a designated line of insurance shall disclose to 
the applicant for such insurance, including a person re-
newing an existing policy of insurance, at the time of the 
original application for the policy or the renewal of the 
policy that—
(1) the insurer will, or will not, gather credit in-
formation, as the case may be; and 
(2) the cost, coverage, and availability of insur-
ance policy will, or will not, be affected by the con-
sumer report or the insurance credit score of the ap-
plicant, as the case may be. 
(b) INFORMATION CONCERNING USE OF CONSUMER 
REPORTS AND INSURANCE CREDIT SCORES.—An insurer 
who uses, or may use, a consumer report or insurance 
credit score as a factor in underwriting an insurance appli-
cation for, or the renewal of, an insurance policy for a 
designated line of insurance shall provide to the applicant 
or policyholder all relevant information on the use of such 
report or scores and the relationship between the use of 
insurance credit scores or any other risk scores or predic-
tors and the cost and the scope of the coverage of such 
insurance to the applicant or policy holder, including the 
following: 
(1) A clear, concise, and detailed summary of 
how the scores and predictors are derived.
(2) All factors taken into account in deriving a 
score or predictor. 
(3) How such factors are applied to the appli-
cant or policyholder. 
(4) How the applicant or policyholder scored on 
all factors. 
(5) The relative weight given to each factor. 
(6) The manner and extent to which such fac-
tors raise or lower the score or predictor. 
(c) PROHIBITION ON USE OF ADVERSE INFORMA-
TION IN DISPUTE.—
(1) IN GENERAL.—An insurer may not take any 
type of adverse action with respect to any applica-
tion for, or renewal of, an insurance policy in a des-
ignated line of insurance that takes into account an 
insurance credit score or credit information con-
tained in a consumer report that the insurer knows 
to be in dispute. 
(2) DISCLOSURE OF MAXIMUM POSSIBLE AND 
ACTUAL
INSURANCE
CREDIT
SCORE.—Additionally, 
for each industry trade line total, an insurer shall 
disclose to the applicant or policy holder—
(A) the highest insurance credit score that 
it is possible to achieve for each such line; and
(B) the actual insurance credit score deter-
mined for the applicant or policy holder for 
such line pursuant to the insurance credit scor-
ing model. 
(3) REDETERMINATION
OF
UNDERWRITING 
FOLLOWING CORRECTION OF CONSUMER REPORT.—
If an insurer has taken adverse action with respect 
to any insurance policy in a designated line of insur-
ance based on inaccurate information contained in a 
consumer report or utilized in computing an insur-
ance credit score, and that inaccurate information is 
subsequently corrected, the insurer shall re-under-
write the impacted policy and refund any premium 
decrease to the insured retroactive to the inception 
date of the policy. 
(d) PROHIBITION
ON USE
OF LOW INSURANCE 
CREDIT SCORES RESULTING FROM MEDICAL EMER-
GENCIES OR OTHER SPECIAL CIRCUMSTANCES.—An in-
surer may not make an adverse inference in underwriting 
an insurance application or policy in a designated line of 
insurance based on a low insurance credit score as a result 
of little or no credit information, unusually high bills asso-
ciated with medical emergencies, or other special cir-
cumstances.
(e) ACTIONS REQUIRED IN CASE OF ADVERSE AC-
TION BASED
ON CONSUMER REPORT
OR INSURANCE 
CREDIT SCORES.—If the use of a consumer report or in-
surance credit score in underwriting an insurance applica-
tion or policy in a designated line of insurance results in 
an adverse action to an applicant or policyholder, the in-
surer shall—
(1) inform the applicant or policyholder that a 
consumer report or insurance credit score adversely 
affected the underwriting of the insurance applica-
tion or policy; 
(2) provide the applicant or policyholder with a 
copy of the consumer report used by the insurer on 
which the action was based, together with a detailed 
explanation, in easy to understand terminology, of—
(A) the specific detailed credit characteris-
tics on which the adverse action was based; and 
(B) the specific actions the applicant or 
policyholder can take to improve the insurance 
credit score; 
(3) ensure that the consumer report provided to 
applicant or policy holder has the name, address, 
and a toll-free telephone number of the consumer re-
porting agency that furnished the credit information;
(4) inform the applicant or policyholder of his 
or her right to verify any credit information with 
that consumer reporting agency (and include the 
names of any other consumer reporting agencies 
which provided information in the consumer report 
used by the insurer and provide the applicant or pol-
icyholder with the addresses and toll-free telephone 
numbers of such other consumer reporting agencies); 
and 
(5) inform the applicant or policyholder of his 
or her right to lodge a dispute with a consumer re-
porting agency in order to have any erroneous or in-
complete information corrected in accordance with 
the Fair Credit Reporting Act. 
(f) PREMIUM PAYMENT PLAN REQUIREMENTS.—
(1) BASED
ON
INSURANCE
PAYMENT
HIS-
TORY.—An insurer that offers premium payment 
plans to applicants and policyholders in a designated 
line of insurance may not deny or condition such 
payment plans on anything other than the payment 
history of such applicant or policyholder with that 
insurance company. 
(2) EVENHANDED
REPORTING
OF
PAYMENT 
HISTORY.—An insurer that offers premium payment 
plans to applicants and policy holders in a des-
ignated line of insurance shall report both the favor-
able and unfavorable payment history of the insured 
to a nationally recognized consumer reporting agen-
cy at least monthly, quarterly, semi-annually, or an-
nually pursuant to policy requirements. 
(3) RECORDKEEPING
REQUIREMENT.—An in-
surer shall compile and maintain, in accordance with 
regulations, a record of the information provided by 
applicant or policyholder with respect to a des-
ignated line of insurance, together with the credit 
history or consumer report obtained by insurer and 
used in underwriting. 
(4) INSURANCE CREDIT SCORERS.—
(A) IN GENERAL.—Any person involved in 
creating, compiling, or providing insurance 
credit scores to or on behalf of an insurer relat-
ing to a designated line of insurance shall not 
provide or sell to any party, other than the in-
surer, information or mailing lists that include 
an insurance credit score or any other informa-
tion that, in whole or in part, is generated or 
derived from credit inquiries or consumer re-
ports of insured persons or insurance appli-
cants.
(B) SCOPE OF APPLICATION.—The infor-
mation to which subparagraph (A) applies in-
cludes information that may identify time peri-
ods during which an insurance policy of the ap-
plicant or insured in a designated line of insur-
ance may expire or an estimated range within 
which the credit score of a person may fall. 
(C) CERTAIN INFORMATION NOT SUBJECT 
TO
THIS
PARAGRAPH.—This paragraph shall 
not be construed as limiting or prohibiting the 
exchange of information that is specifically au-
thorized under the Fair Credit Reporting Act or 
this Act. 
SEC. 4. ESTABLISHMENT OF GENERAL REQUIREMENTS TO 
SUBMIT INSURANCE CREDIT SCORING MOD-
ELS AND INSURANCE CREDIT SCORES USED 
BY INSURERS IN UNDERWRITING. 
The Federal Trade Commission shall, by regulation, 
establish requirements for insurers to compile and submit 
insurance credit score information with respect to des-
ignated lines of insurance to the Commission for each an-
nual reporting period, in accordance with this Act.
SEC. 5. REPORT ON RELATIONSHIP BETWEEN CREDIT AND 
INSURANCE CREDIT SCORES AND THE RACE, 
INCOME, GEOGRAPHIC LOCATION AND AGE 
OF INSURANCE APPLICANTS AND POLICY-
HOLDERS. 
(a) STUDY REQUIRED.—The Federal Trade Commis-
sion shall conduct a comprehensive investigation of the re-
lationship between use by insurers of credit information 
and insurance credit scores, with respect to designated 
lines of insurance, and risk factor of loss, including the 
impact by race, income, geographic location and age. 
(b) REPORT REQUIRED.—Before the end of the 15-
month period beginning on the date of the enactment of 
this Act, the Commission shall submit a report to the Con-
gress of the findings and conclusions of the Commission 
with regard to the study under subsection (a), together 
with such recommendations for legislative or administra-
tive action as the Commission may determine to be appro-
priate. 
SEC. 6. DESIGNATIONS. 
(a) DESIGNATION OF LINES OF INSURANCE.—
(1) IN GENERAL.—For purposes of this Act, 
the Commission shall, by regulation, designate lines 
of insurance as designated lines of insurance as fol-
lows:
(A) AUTOMOBILE.—The Commission shall 
designate private passenger automobile insur-
ance and shall also designate any sublines and 
coverage types of private passenger automobile 
insurance that the Commission considers appro-
priate, after comparing the availability, afford-
ability, and type of coverage in such lines by ge-
ographic area. 
(B) NONCOMMERCIAL
INSURANCE
FOR 
RESIDENTIAL PROPERTY.—
(i) IN
GENERAL.—The Commission 
shall designate homeowners insurance, in-
cluding mobile homeowners, manufactured 
homeowners, condominium owners, and 
renters’ coverage, dwelling fire and allied 
lines, earthquake coverage for a residence 
or personal property, personal liability and 
theft coverage, mechanical breakdown cov-
erage for personal auto or home appli-
ances, and shall distinguish the coverage 
types in such lines by the perils covered 
and by market or replacement value. 
(ii) NATURE OF OFFERING.—With re-
spect to lines of insurance designated 
under clause (i), the Commission shall also
require insurers to inform the Commission 
as to whether the insurance is offered vol-
untarily or in conjunction with a residual 
market mechanism. 
(C) SMALL
BUSINESS.—The Commission 
shall designate as designated lines of insurance 
any lines of small business insurance, and any 
sublines and coverage types of small business 
insurance, that the Commission determines to 
be appropriate after comparing the availability, 
affordability, and type of coverage in such lines 
by geographic area. 
(2) REPORT ON NONDESIGNATED LINES.—At 
any time the Commission determines that any line 
of insurance not described in paragraph (1) should 
be a designated line because disparities in coverage 
provided under such line exist among geographic 
areas having different income levels or racial com-
position, the Commission shall submit a report rec-
ommending designating such line of insurance as a 
designated line for purposes of this Act to the Com-
mittee on Financial Services of the House of Rep-
resentatives and to the Senate. 
(b) DURATION OF DESIGNATION.—
(1) IN GENERAL.—Except as provided in para-
graph (2), the Commission shall make the designa-
tions under this section once every 5 years, by regu-
lation. 
(2) ALTERATION
OF
DESIGNATION.—During 
any 5-year period referred to in paragraph (1) in 
which designations are in effect, the Commission 
may amend or revise the designated lines, sublines, 
and coverage types only by regulation and only in 
accordance with the requirements of this section. 
(c) NOTICE OF DESIGNATIONS.—Before the end of 
the 90-day period beginning on the date a designation of 
a line of insurance is made under this section, the Com-
mission shall notify any person who has an interest in or 
is affected by such designation of the designation. 
(d) OBTAINING
INFORMATION.—The Commission 
may require insurers to submit to the Commission such 
information as the Commission considers necessary to 
make designations specifically required under this Act. 
SEC. 7. ENFORCEMENT. 
(a) CIVIL PENALTIES.—Any insurer who is deter-
mined by the Commission, after providing opportunity for 
a hearing on the record, to have violated any requirement 
of this Act or any regulation prescribed under this Act