An Act To Ensure Fairness Regarding Use of Consumer Credit Reports in Insurance Underwriting LR0042(02)
Maine Legislature, Session 121, LD 0470
Committee Amendment CA_A_H220 (House)
Amends: 24-A MRSA §2169-B

COMMITTEE AMENDMENT "/).' to H.P. 362, L.D. 470, Bill, "An 
Act To Ensure Fairness Regarding Use of Consumer Credit Reports 
in Insurance Underwriting" 
Amend the bill by striking out everything after the enacting 
clause and before the summary and inserting in its place the 
following: 
. Sec. 1. 24-A MRSA §2169-B is enacted to read: 
§2169-B. 
Use of consumer reports in insurance underwriting 
1. 
Definitions. 
As 
used 
in this 
section, 
unless 
the 
context 
otherwise 
indicates, 
the 
following 
terms 
have 
the 
following meanings. 
A. 
"Adyerse action" means a denial or cancellation of, an 
increase in any charge for or a reduction or other adverse 
or unfavorable change in the terms of coverage or amount of 
any insurance, existing or applied for, in connection with 
the underwriting of personal insurance. 
B. 
"Applicant" means an individual who has applied to be 
covered by a personal insurance policy with an insurer. 
C. 
"Consumer" 
means 
an 
individual 
insured 
whose 
credit 
information is used or whose insurance score is calculated 
in the' underwriting or rating of a personal insurance policy 
or an applicant for a personal insurance policy. 
Page l-LR0042(2) 
COMMITTEE AMENDMENT 
". 
\' 
,"-
::~.t ~.:Ift' 
COMMITTEE AMENDMENT .. If.. to H.P. 362, L.D. 470 
D. 
"Consumer report" has the same meaning as in Title 10, 
section 1312, subsection 3. 
E. 
"Consumer reporting agency" has the same meaning as in 
Title 10, section 1312, subsection 4. 
F. "Credit information" means any credit-related information 
derived from a consumer report, found on a consumer report 
itself 
or 
provided 
on 
an 
application 
for 
personal 
insurance. 
"Credit 
information" 
does 
not 
include 
information that is not credit-related regardless of whether 
it is contained in a credit report or application or used to 
calculate an insurance score. 
G. 
"Insurance score" means 
a 
number or rating that is 
derived from an algorithm, computer application, model or 
other process that is based in whole or in part on credit 
information for the purposes of predicting the future loss 
exposure of an individual applicant or insured. 
H. "Personal insurance" means private passenger automobile, 
homeowners, motorcycle, mobile home owners and noncommercial 
dwelling 
fire 
insurance 
policies 
and 
boat, 
personal 
watercraft, 
snowmobile 
and 
recreational 
vehicle policies 
that are individually underwritten for personaL family or 
household use. 
2. 
Use 
of 
consumer 
reports. 
Notwithstanding 
this 
subsection, an insurer may use a consumer report as permitted 
under the Fair Credit Reporting Act pursuant to Title 10, chapter 
and 15 United States Code, Chapter 41. 
An insurer may use 
information 
obtained 
from 
a 
consumer 
reporting 
agency 
to 
calculate 
an 
insurance 
score 
for 
underwriting 
and 
rating 
purposes, except that an insurer may not; 
A. 
Use an insurance score that is calculated using income, 
gender. address, zip code, ethnic group, religion, marital 
status or nationality of a consumer as a factor; 
B. 
Deny, cancel or refuse to renew a policy of personal 
insurance solely on the basis of credit information without 
consideration· of any other applicable underwriting factor 
independent 
of 
credit 
information 
and 
not 
expressly 
prohibited by paragraph A; 
C. 
Base an insured's renewal rates for personal insurance 
solely upon credit information, without consideration of any 
other applicable factor independent of credit information; 
COMMITTEE AMENDMENT 
• It': 
\. 
~,:~:~ ~~ 
COMMITTEE AMENDMENT "ff.: to H.P. 362, L.D. 470 
D. 
Take an adverse action against a consumer solely because 
that consumer does not have a credit card account. without 
consideration of any other applicable factor independent of 
credit information: 
E. 
Consider an absence of credit information, the number of 
inquiries or an inability to calculate an insurance score in 
underwriting or rating personal insurance unless the insurer 
has demonstrated to the superintendent that an absence of 
credit information, the number of inquiries or an inability 
to calculate an insurance score is a relevant factor to the 
risk underwritten or rated by the insurer and the insurer 
applies 
this 
factor 
in 
a 
manner 
approved 
by 
the 
superintendent: or 
F. 
Take 
an adverse action against a 
consumer based on 
credit information unless an insurer obtains and uses 
a 
credit report issued or an insurance score calculated within 
days before the date the policy is first written or 
renewal is issued. 
3. 
Notice 
of 
use 
of 
credit 
information. 
If 
credit 
information is used by an insurer, an insurer shall disclose, 
either on the insurance application or at the time the insurance 
application is taken. that credit information may be obtained by 
the insurer in connection with the application. 
The disclosure 
must be written or provided to an applicant in the Same medium as 
the application for insurance. 
The insurer is not required to 
provide the disclosure statement required under this subsection 
to 
any 
insured 
on 
a 
renewal 
policy if 
such 
consumer 
has 
previously been provided a disclosure statement. 
An insurer may 
demonstrate 
compliance 
with 
this 
subsection 
by 
using 
the 
following example disclosure statement: "In connection with this 
application for insurance, we may review your credit report or 
obtain or 
use 
a 
credit-based insurance 
score 
based 
on 
the 
information contained in that credit report. 
We may use a 3rd 
party in connection with the development of your insurance score." 
4. 
Notice of adverse action. 
If an insurer makes 
an 
adverse action based on credit information, the insurer shall 
provide the consumer with notice as required by this subsection. 
The insurer shall provide: 
A. Notice to the consumer that an adverse action has been 
taken in accordance with the requirements of the Fair Credit 
Reportlng Act pursuant to Title 10, 
chapter 
and 15 
United States Code, Chapter 41: and 
B. 
Notice to the consumer explaining the reason for the 
adverse action. 
The reason or reasons must be provided in 
COMMITTEE AMENDMENT 
, , 
\ .' 
.~ 
~,-
COMMITTEE AMENDMENT ,,(I.. to H.P. 362, L.D. 470 
sufficiently 
clear 
and 
specific 
language 
so 
that 
an 
individual can identify the basis for the insurer's decision 
to take an adverse action. 
The 
notice must 
include 
a 
description of 
up 
to 
factors 
that were 
the 
primary 
influences of the adverse action. 
The use of a generalized 
term such as "poor credit history," "poor credit rating" or 
"poor 
insurance 
score" 
does 
not 
meet 
the 
explanation 
requirements 
of 
this 
paragraph. 
Standardized 
credit 
explanations provided by 
consumer 
reporting agencies 
or 
other 3rd-party vendors are deemed to 
comply with this 
paragraph. 
5. 
Di&pute 
resolution and error correction. - If it is 
determined through the dispute resolution process set forth in 
Title 
10, 
section 
1317 
or 
United 
States 
Code, 
Section 
1681i(a)(5) that the credit information of a current insured was 
incorrect or incomplete and if the insurer receives notice of 
such determination from either the consumer reporting agency or 
from the insured, the insurer shall reunderwrite and rerate the 
consumer 
within 
days 
of 
recel.vl.ng 
the 
notice. 
After 
reunderwriting or rerating the insured, the insurer shall make 
any adjustments necessary, consistent with its underwriting and 
rating guidelines. 
If an insurer determines that the insured has 
overpaid premium, the insurer shall refund to the insured the 
amount of overpayment calculated back to the shorter of ei ther 
the last 12 months of coverage or the actual policy period. 
6. Filing of insurance scoring model&. 
An insurer that uses 
insurance scores to underwrite and rate risks shall file the 
scoring model or other scoring processes used by the insurer with 
the superintendent. 
A 3rd party may file scoring models on 
behalf of insurers. 
A filing that includes insurance scoring 
must 
include 
loss 
experience 
justifying 
the 
use 
of 
credit 
information if required by the superintendent. 
The insurance 
scoring 
model 
contained 
in 
a 
filing 
reguired 
under 
this 
subsection is confidential and not a public record within the 
meaning of Title 1, section 402, subsection 3. 
7. Indemnification. 
An insurer shall indemnify, defend and 
hold agents harmless from and against all liability, fees and 
costs arising out of or relating to the actions, errors or 
omissions of a producer who obtains or uses credit information or 
insurance scores for an insurer, provided the producer, in the 
exercise of reasonable care, 
follows 
the instructions of or 
procedures established by the insurer and complies with any 
applicable 
law 
or 
regulation. 
This 
subsection 
may 
not 
be 
construed to provide a consumer or other insured with a cause of 
action that does not otherwise exist in the absence of this 
subsection. 
This subsection may not be construed to indemnify a 
producer for the producer's omission when a producer elects not 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT ,~ to H.P. 362, L.D. 470 
to obtain a credit-related insurance score in connection with an 
application for personal insurance coverage from an insurer that 
the producer represents if that insurer uses credi t information 
as permitted under this section to underwrite that coverage. 
8." AWlicability. 
This section applies only to personal 
insurance. 
This section does not apply to commercial insurance.' 
SUMMARY 
This 
amendment 
replaces 
the bill. 
The 
language 
in 
the 
amendment is more closely based on a model act from the National 
Conference of Insurance Legislators. Like the bill, the amendment 
prohibits an insurance company authorized to transact personal 
insurance in this State from 
making underwriting and rating 
decisions based solely on credit information. 
The amendment also 
prohibits an insurer 
from using 
an insurance 
score that is 
calculated using income, gender, address, zip code, ethnic group, 
religion, marital status or nationality as a factor. 
An insurer 
may continue to use consumer credit reports in underwriting and 
rating decisions in conjunction with other relevant underwriting 
criteria to the extent allowed under state and federal fair 
credi t reporting laws. 
The amendment also requires insurers to 
provide notice to a 
consumer who is adversely affected by a 
credit report, but allows that notice to be provided in writing 
or in the same medium as the application for insurance was made 
to the insurer. 
The amendment adds a requirement that insurers 
file their insurance scoring models with the Superintendent of 
Insurance. 
The amendment also adds an indemnification provision 
for the protection of insurance producers who obtain or use 
credit information on behalf of an insurer. 
FISCAL :\OTE HEQl IIU_1) 
(See attached) 
COMMITTEE AMENDMENT 
Approved: 04/25103 ~ae 
Office of Fiscal and Program Review 
LD470 
An Act To Ensure Fairness Regarding Use of Consumer Credit Reports 
in Insurance Underwriting 
LR0042(02) 
Fiscal Note for Bill as Amended by Committee Amendment" " 
Committee: Insurance and Financial Services 
Fiscal Note Required: Yes 
Fiscal Note 
Minor cost increase - Other Special Revenue Funds 
LR0042(2) - Fiscal Note - Page 1 of 1