Ohio Administrative Code › Title 3901 - Department of Insurance › Chapter 3901-1 - General Provisions › Section 3901-1-55 - Use of Credit history and credit scores

Current through all regulations passed and filed through July 1, 2024
(A) Authority
This rule is issued pursuant to section
				3901.041 of the Revised Code
				which provides that the superintendent of insurance shall adopt, amend, and
				rescind rules and make adjudications, necessary to discharge the
				superintendent's duties and exercise the superintendent's powers, including,
				but not limited to, the superintendent's duties and powers under Chapters 1751.
				and 1753. and Title XXXIX of the Revised Code, subject to Chapter 119. of the
				Revised Code.
Sections
				3901.20 and
				3901.21 of the Revised Code
				prohibit unfair or deceptive practices in the business of insurance and define
				certain acts or practices as unfair or deceptive. Section
				3901.21 also provides that the
				enumeration of specific unfair or deceptive acts or practices in the business
				of insurance is not exclusive or restrictive, or intended to limit the powers
				of the superintendent of insurance to adopt rules to implement section
				3901.21 or to take action under
				other sections of the Revised Code.
(B) Purpose
The purpose of this rule is to clearly define certain unfair
				practices and to set forth standards with respect to insurers' and agents' use
				of credit history and credit scores in connection with underwriting and rating
				personal lines coverage.
(C) Scope
This rule applies only to personal lines coverage as defined in
				paragraph (D)(6) of this rule.
(D) Definitions
As used in this rule:
(1) "Adverse action" has the same meaning as
			 defined in the Fair Credit Reporting Act,
			 15 U.S.C.
			 1681 et seq. (1998), and includes 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 or rating of
			 insurance. Issuance of a policy at a rate higher than that which the consumer
			 would have received if the consumer's credit history had not been taken into
			 account is an adverse action.
(2)
			 "Consumer" means any insured or applicant for personal lines coverage.
(3) "Credit history" means any
			 written, oral, or other communication of any information 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 rates, placement within a tier or with an
			 affiliated company, or eligibility for coverage.
(4) "Credit 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.
(5) "Insurance score" and "credit based
			 insurance score" have the same meaning: a number or rating that is derived from
			 an algorithm, computer application, a model or other process that is based in
			 whole or in part on a credit score or credit history, for the purpose of
			 predicting the future insurance loss exposure of a consumer (that is, any
			 insured or applicant).
(6)
			 "Personal lines" means a policy of property and casualty insurance issued to a
			 natural person primarily for personal or family protection for personal
			 automobile, homeowner's, tenant's, mobile-homeowner's, non-commercial dwelling
			 fire or personal umbrella coverage.
(7) "Consumer reporting agency" means any
			 person which, for monetary fees, dues, or on a cooperative nonprofit basis,
			 regularly engages in whole or in part in the practice of assembling or
			 evaluating consumer credit information or other information on consumers for
			 purposes of furnishing such information to third parties.