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A00795 Summary:

BILL NOA00795
 
SAME ASNo Same As
 
SPONSORHunter
 
COSPNSR
 
MLTSPNSR
 
Amd §2801, add §2802-a, Ins L
 
Prohibits automobile insurers from refusing to issue or renew an individual's policy based on such individual's credit history.
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A00795 Actions:

BILL NOA00795
 
01/11/2023referred to insurance
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A00795 Memo:

NEW YORK STATE ASSEMBLY
MEMORANDUM IN SUPPORT OF LEGISLATION
submitted in accordance with Assembly Rule III, Sec 1(f)
 
BILL NUMBER: A795
 
SPONSOR: Hunter
  TITLE OF BILL: An act to amend the insurance law, in relation to prohibiting automobile insurers from refusing to issue or renew an individual's policy based on such individual's credit history   SUMMARY OF PROVISIONS: Section 1: Definitions. Section 2: Provides that insurers cannot refuse to issue an automobile insurance policy to an applicant solely on the basis of such applicant's credit information. Nor can an insurer's decision to renew an existing automobile insurance policy be based solely on the insured's credit information. Furthermore, when determining whether to renew an existing automobile insurance policy, an insurer cannot request the insured's credit information or credit report from a consumer reporting agency. Section 3: Sets the effective date.   JUSTIFICATION: Currently, New York State permits credit information to be a reason for denial or non-renewal by an automobile insurer. However, an automobile insurance applicant's credit information is a socio-economic factor that has nothing to do with the applicant's driving ability. Many studies have demonstrated that the usage of credit information in an application for automobile insurance can have a disproportionate effect on minori- ties and low-income individuals that have otherwise clean driving records. This Bill seeks to limit the affect that an individual's cred- it history can have on an application for automobile insurance. If adopted, an individual's credit history cannot be the sole reason for the issuance, renewal, or denial of an automobile insurance policy. And during the renewal process, an insurer cannot request an individual's credit information or credit report from a consumer reporting agency.   FISCAL IMPACT ON THE STATE: To be determined.   LEGISLATIVE HISTORY: 2021-22: A7371   EFFECTIVE DATE: This act shall take effect immediately.
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A00795 Text:



 
                STATE OF NEW YORK
        ________________________________________________________________________
 
                                           795
 
                               2023-2024 Regular Sessions
 
                   IN ASSEMBLY
 
                                    January 11, 2023
                                       ___________
 
        Introduced by M. of A. HUNTER -- read once and referred to the Committee
          on Insurance
 
        AN ACT to amend the insurance law, in relation to prohibiting automobile
          insurers  from refusing to issue or renew an individual's policy based
          on such individual's credit history
 
          The People of the State of New York, represented in Senate and  Assem-
        bly, do enact as follows:
 
     1    Section  1.  Subsections  (c), (d), (f) and (g) of section 2801 of the
     2  insurance law, as added by chapter 215 of the laws of 2004, are  amended
     3  and a new subsection (j) is added to read as follows:
     4    (c) "Applicant" shall mean an individual who has applied to be covered
     5  by a personal lines insurance policy or automobile insurance policy with
     6  an insurer.
     7    (d)  "Consumer" shall mean an insured whose credit information is used
     8  or whose insurance score is calculated in the underwriting or rating  of
     9  a  personal lines insurance policy or automobile insurance policy, or an
    10  applicant for such a policy.
    11    (f) "Credit information" shall  mean  any  credit-related  information
    12  derived  from  a  credit  report,  found  on  a credit report itself, or
    13  provided on an application for personal lines  insurance  or  automobile
    14  insurance.  Information  that is not credit-related shall not be consid-
    15  ered "credit information", regardless of whether it is  contained  in  a
    16  credit report or in an application, or is used to calculate an insurance
    17  score.
    18    (g)  "Credit  report"  shall mean any written, oral, or other communi-
    19  cation of information by  a  consumer  reporting  agency  bearing  on  a
    20  consumer's  credit  worthiness, credit standing or credit capacity which
    21  is used or expected to be used or collected in whole or in part for  the
    22  purpose  of  serving  as  a factor to determine personal lines insurance
    23  premiums, automobile insurance premiums, eligibility  for  coverage,  or
    24  tier placement.
 
         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD03373-01-3

        A. 795                              2
 
     1    (j)  "Automobile insurance" shall mean a contract of insurance, issued
     2  or issued for delivery in this state, on a risk located or  resident  in
     3  this  state,  insuring  against losses or liabilities arising out of the
     4  ownership, operation, or use of a motor vehicle, predominantly used  for
     5  non-business  purposes, when a natural person is the named insured under
     6  the policy of automobile insurance; provided, however, that the  use  or
     7  operation  of  the motor vehicle by a transportation network driver as a
     8  TNC vehicle in accordance with article forty-four-B of the  vehicle  and
     9  traffic law shall not be included in determining whether the motor vehi-
    10  cle is being used predominantly for non-business purposes.
    11    §  2.  The  insurance law is amended by adding a new section 2802-a to
    12  read as follows:
    13    § 2802-a. Use of credit information; automobile insurance. (a)  Insur-
    14  ers  shall  be prohibited from refusing to issue an automobile insurance
    15  policy to any applicant solely on the basis of such  applicant's  credit
    16  information.
    17    (b)  Insurers  shall  be prohibited from refusing to renew an existing
    18  automobile insurance policy solely upon the basis of the named insured's
    19  credit information and shall be prohibited for  the  purpose  of  policy
    20  renewal from requesting such named insured's credit information or cred-
    21  it report from a consumer reporting agency.
    22    § 3. This act shall take effect immediately.
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