AK Stat § 21.36.460 (2021)
2021 Alaska Statutes|Title 21. Insurance|Chapter 36. Trade Practices and Frauds|Article 5. Specific Acts and Types of Insurance.|Sec. 21.36.460. Uses of and restrictions on credit history or insurance scoring applicable to personal insurance.

(a) If an insurer writing personal insurance uses credit information in underwriting or rating a consumer, the insurer shall disclose, either on the insurance application or at the time the insurance application is taken, and at the time of renewal, that the insurer will obtain credit information in connection with the application or renewal. The disclosure required under this subsection shall be in writing or in the same medium as the application for insurance or the notice of renewal. Use of the following statement constitutes compliance with this subsection: “In connection with this application for insurance or notice of renewal, we will review your credit report or obtain or use a credit-based insurance score based on the information contained in your credit report. We may use this information to decide whether to insure you or how much to charge.” If an insurer uses a third party to calculate the consumer's insurance score, the disclosure required under this subsection must also contain language similar to: “We may use a third party in connection with the development of your insurance score.” (b) An insurer that takes adverse action involving personal insurance against a consumer based in whole or in part on credit history or insurance score shall provide notice of the adverse action, in writing, to the consumer. The notice must (1) clearly and specifically state the significant factors of the credit history or insurance score that resulted in the adverse action, in a manner that allows the consumer to identify the basis for the adverse action; (2) inform the consumer that the consumer is entitled to (A) request reconsideration of the adverse action; and (B) a free copy of the consumer's report under 15 U.S.C. 1681 et seq. (Fair Credit Reporting Act); (3) inform the consumer that the consumer has the right to correct errors in the credit report; (4) advise the consumer on ways to improve the consumer's insurance score; (5) provide information to assist the consumer with the error correction process; and (6) inform the consumer (A) that reasonable exceptions to the insurer's rates, rating classifications, company or tier placement, or underwriting rules or guidelines are available for a consumer who has experienced, and whose credit history has been affected by, one or more extraordinary life circumstances listed under AS 21.36.461; (B) how the consumer may request an exception from the insurer; and (C) that, for a request for an exception to be considered by the insurer, the consumer must submit the request to the insurer not later than 60 days after receiving the notice under this subsection. (c) An insurer may use a consumer's credit history or insurance score to cancel, deny, nonrenew, underwrite, or rate personal insurance only in combination with other substantive underwriting factors. If an insurer uses a consumer's credit history or insurance score, not later than 24 months after the insurer most recently used the consumer's credit history or insurance score to underwrite or rate a policy, the insurer shall reunderwrite and rerate the policy based on the consumer's current (1) credit history or insurance score and current risk characteristics; or (2) risk characteristics but not including, in whole or in part, the consumer's credit history or insurance score; for the purposes of this subsection, (A) refusal to offer personal insurance coverage to a consumer constitutes denial of personal insurance; and (B) an offer of placement with an affiliate insurer does not constitute denial of coverage. (d) An insurer may not (1) cancel, deny, nonrenew, underwrite, or rate personal insurance coverage based in whole or in part on (A) the absence of credit history or the inability to determine the consumer's credit history if the insurer has received accurate and complete information from the consumer; this subparagraph does not apply if the insurer treats the consumer as if the consumer had neutral credit information as approved by the director; (B) credit inquiries not initiated by the consumer; (C) credit inquiries relating to insurance coverage if identified on a consumer's credit report; (D) credit inquiries by the consumer for the consumer's own credit information; (E) multiple lender inquiries if coded on the consumer's credit report as being for automobile, boat, recreation vehicle, or home mortgage loans, unless all inquiries under that code within a 30-day period are counted as one; (F) credit history or an insurance score based on collection accounts identified with a medical industry code; (G) the consumer's use of a particular type of credit card, charge card, or debit card or the absence of a credit card; (H) the consumer's total available line of credit; however, the consumer's ratio of debt to total available line of credit may be considered; (I) the age of the most recent automobile or home loan obtained by the consumer; however, an insurer may consider the bill payment history or total number of loans; or (J) the person's age when credit is established; (2) use the credit history of the consumer when the consumer is adversely affected by a joint account owner who was the spouse of the consumer or a joint account owner who is the spouse of the consumer and who is a party to a divorce or dissolution action against the consumer; this paragraph applies only if the consumer provides written notice to the insurer that identifies the credit information that is adversely affected by the joint account owner; this paragraph does not prevent the use of credit history that is not identified by the consumer as required by this paragraph; (3) use an insurance score that is calculated using the income, age, sex, address, zip code, census block, ethnic group, religion, marital status, or nationality of the consumer as a factor; (4) use credit history to cancel, deny, nonrenew, underwrite, or rate a personal insurance policy if the history is obtained more than 90 days before the policy is cancelled, denied, nonrenewed, underwritten, or rated; this paragraph does not require an insurer to reevaluate a consumer's credit history more frequently than is required under (c) of this section; (5) use an insurance score derived from an insurance scoring model to determine eligibility for an insurance payment plan; this paragraph does not prohibit the use of credit history to evaluate the ability of the consumer to make payments. (e) If incorrect credit history is used to underwrite or rate personal insurance coverage and a consumer is charged higher premiums or offered less favorable policy terms due to the disputed credit history, the insurer shall reissue or rerate the policy retroactive to the effective date of the current policy term, and the policy, as reissued or rerated, shall provide premiums and policy terms the consumer would have been eligible for if accurate credit history had been used to underwrite or rate the policy. If an insurer determines that the insured has overpaid a premium, the insurer shall refund to the insured the amount of overpayment calculated back to the last 12 months of coverage or the actual policy period, whichever period is shorter. This subsection applies only if the consumer discovers the incorrect credit history within 12 months after the policy is issued, resolves the dispute as described under (f) of this section or under the process in 15 U.S.C. 1681 et seq. (Fair Credit Reporting Act), and notifies the insurer in writing that the dispute has been resolved. (f) If the use of disputed credit history results in denial or cancellation of personal insurance coverage, an insurer shall reunderwrite the coverage without the use of credit information as a factor. This subsection applies only if, within 10 days following denial or cancellation, the consumer provides a reconsideration certification to the insurer that sets forth any items of the credit history that are disputed and that indicates that the consumer has initiated the dispute resolution process in 15 U.S.C. 1681 (Fair Credit Reporting Act) by requesting a copy of the consumer's credit report. An insurer's reconsideration certification form (1) is subject to filing and approval by the director under AS 21.42.120; and (2) shall be provided by an insurer to the consumer at the time of denial or cancellation. (g) This section does not require an insurer to use credit history for any purpose. (h) An insurer shall indemnify, defend, and hold the insurer's producers harmless from all liability, fees, and costs arising out of or relating to the actions, errors, or omissions of an insurance producer who obtains or uses credit information or insurance scores for an insurer if the insurance producer follows the instructions of or procedures established by the insurer and complies with any applicable law or regulation. This subsection does not provide a consumer or other insured with a cause of action that does not exist in the absence of this subsection. (i) In this section, (1) “adverse action” has the meaning given in 15 U.S.C. 1681 et seq. (Fair Credit Reporting Act) and includes (A) cancellation, denial, or failure to renew personal insurance coverage; (B) charging a higher insurance premium for personal insurance than would have been offered if the credit history or insurance score had been more favorable, whether the charge is by (i) application of a rating rule; (ii) assignment to a rating tier that does not have the lowest available rates; or (iii) placement with an affiliate company that does not offer the lowest rates available to the consumer within the affiliate group of insurance companies; or (C) any reduction or adverse or unfavorable change in the terms of coverage or amount of personal insurance due to a consumer's credit history or insurance score; a reduction or adverse or unfavorable change in the terms of coverage occurs when (i) coverage provided to the consumer is not as broad in scope as coverage requested by the consumer but available to other insureds of the insurer or any affiliate; or (ii) the consumer is not eligible for benefits that are available through affiliate insurers; (2) “affiliate” has the meaning given in AS 21.22.200; (3) “consumer” means an individual policyholder or applicant for insurance; (4) “consumer report” has the meaning given in 15 U.S.C. 1681 et seq. (Fair Credit Reporting Act); (5) “credit history” means written, oral, or other communication of information by a consumer reporting agency bearing on a consumer's creditworthiness, credit standing, or credit capacity that is used or expected to be used, or collected in whole or in part, for the purpose of serving as a factor in determining personal insurance premiums or eligibility for coverage; (6) “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 history; (7) “personal insurance” means (A) private passenger automobile or motorcycle coverage; (B) homeowner coverage, including mobile homeowner's, manufactured homeowner's, condominium owner's, and renter's coverage; (C) dwelling property coverage; (D) earthquake coverage for a residence or personal property; (E) personal liability and theft coverage; (F) personal property inland marine coverage; (G) personal boat, watercraft, snowmobile, and recreational vehicle coverage; and (H) umbrella insurance coverage.