THE GENERAL ASSEMBLY OF PENNSYLVANIA

SENATE BILL

INTRODUCED BY WILLIAMS, TARTAGLIONE, KITCHEN, FONTANA, STOUT, BROWNE, FERLO, WASHINGTON, EARLL, O'PAKE, COSTA AND FARNESE, JANUARY 29, 2009

REFERRED TO BANKING AND INSURANCE, JANUARY 29, 2009  

AN ACT

Amending the act of May 17, 1921 (P.L.789, No.285), entitled, as

amended, "An act relating to insurance; establishing an

insurance department; and amending, revising, and

consolidating the law relating to the licensing,

qualification, regulation, examination, suspension, and

dissolution of insurance companies, Lloyds associations,

reciprocal and inter-insurance exchanges, and certain

societies and orders, the examination and regulation of fire

insurance rating bureaus, and the licensing and regulation of

insurance agents and brokers; the service of legal process

upon foreign insurance companies, associations or exchanges;

providing penalties, and repealing existing laws," providing

for use of credit history of insureds; and further providing

for penalties imposed by Insurance Department.

The General Assembly of the Commonwealth of Pennsylvania

hereby enacts as follows:

Section 1.  The act of May 17, 1921 (P.L.789, No.285), known

as The Insurance Department Act of 1921, is amended by adding a

section to read:

Section 652-A.  Use of credit history of insured.

(a)  General rule.--An insurer shall not deny, cancel or

refuse to renew personal insurance due in whole or in part to an

insured's credit history. Placement with an affiliated insurer

does not constitute denial of coverage under this section.

(b)  Rules and regulations.--The department may adopt such

rules and regulations as are necessary to administer this

section.

(c)  Violations.--Upon satisfactory evidence of the conduct

violating this section by any insurer or insurance producer or

on satisfactory evidence of such conduct that would disqualify

the insurance producer from initial issuance of a certificate of

qualification under former section 604 or 622 or under this

article, the department may pursue any one or more of the

following courses of action regardless of whether the insurance

producer was previously so authorized by the department:

(1)  Suspend or revoke or refuse to renew the certificate

of qualification or license of the offending party or

parties.

(2)  Impose a civil penalty of not more than $5,000 for

each action in violation of any of the provisions listed in

this subsection.

(3)  Issue an order to cease and desist.

(4)  Impose such other conditions as the department may

deem appropriate.

(d)  Definitions.--As used in this section, the following

words and phrases shall have the meanings given to them in this

subsection:

"Credit history."  A written, oral or other communication of

information by a consumer reporting agency bearing on a

consumer's credit worthiness, credit standing or credit capacity

which is used, expected to be used or collected in whole or in

part for the purpose of serving as a factor in establishing

personal insurance premiums or eligibility for coverage.

"Insurance score."  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.

"Personal insurance."  Property and casualty insurance to be

used primarily for personal, family or household purposes, such

as homeowner and private passenger automobile insurance.

"Tier."  A category within a single insurer into which

insureds with substantially like insuring, risk or exposure

factors and expense elements are placed for the purposes of

determining rate or premium.

Section 2.  This act shall take effect in 60 days.