BILL NUMBER: AB 5	AMENDED
	BILL TEXT

	AMENDED IN SENATE  FEBRUARY 28, 2002
	AMENDED IN ASSEMBLY  APRIL 18, 2001

INTRODUCED BY   Assembly Member Calderon

                        DECEMBER 4, 2000

   An act to add Section 1861.17 to the Insurance Code, relating to
insurance.



	LEGISLATIVE COUNSEL'S DIGEST


   AB 5, as amended, Calderon.  Insurance rates:  credit ratings.
   (1) Existing law provides for  the  regulation of
insurers by the Insurance Commissioner and imposes various
obligations on insurers with respect to the determination of
insurance rates.  Existing law provides for the commissioner to
enforce these provisions by imposing certain penalties and taking
various licensing actions.  Existing law also provides that a willful
violation of certain provisions is a misdemeanor.
   This bill would prohibit an insurer from  refusing to
issue or renew a private passenger automobile insurance policy based
solely on information obtained from a consumer credit report.  The
bill would provide for the imposition of civil penalties on an
insurer that violates its provisions   using credit
ratings, credit reports, credit scoring models, or credit information
to underwrite, classify, or rate certain automobile and property
insurance policies.  The bill would also prohibit an insurer from
refusing to issue those policies, or from nonrenewing or canceling
those policies, based upon credit grounds  .  Because a willful
violation of this provision would be a crime, this bill would impose
a state-mandated local program.
  (2) The California Constitution requires the state to reimburse
local agencies and school districts for certain costs mandated by the
state.  Statutory provisions establish procedures for making that
reimbursement.
   This bill would provide that no reimbursement is required by this
act for a specified reason.
   Vote:  majority.  Appropriation:  no.  Fiscal committee:  yes.
State-mandated local program:  yes.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:


  SECTION 1.  Section 1861.17 is added to the Insurance Code, to
read:  
   1861.17.  (a) Every person who meets the criteria of Section
1861.025 shall be qualified to purchase a Good Driver Discount policy
from the insurer of his or her choice.  An insurer shall not refuse
to offer and sell a Good Driver Discount policy to any person who
meets the standards set forth in Section 1861.025.
   (b) An insurer shall not refuse to issue or renew a private
passenger automobile insurance policy based solely on information
received in a consumer credit report.
   (c) Any insurer that takes an adverse underwriting action on a
private passenger automobile insurance policy solely based on
information obtained from a consumer credit report shall be bound by
the provisions set forth in subdivision (a) of Section 1785.20 of the
Civil Code.
   (d) An insurance credit scoring model shall not take into account
any items appearing on a consumer credit report that are being
disputed by the consumer with the consumer credit reporting company.

   (e) An insurer that violates this section shall be liable to the
state for a civil penalty to be fixed by the commissioner, not to
exceed five thousand dollars ($5,000) for each act, or if the act is
willful, a civil penalty not to exceed ten thousand dollars
($10,000).  The penalty imposed by this section shall be subject to
the provisions of subdivision (b) of Section 790.035.  
   1861.17.  (a) Notwithstanding any other provision of law, an
insurer shall not use credit ratings, credit reports, credit scoring
models, or credit information to underwrite, classify, or rate
insurance policies that are subject to Section 660 or 675.  An
insurer shall not refuse to issue, or nonrenew or cancel, an
insurance policy based upon credit ratings, credit reports, credit
scoring models, or credit information.
   (b) The commissioner shall enforce this section pursuant to
Section 1861.14. 
  SEC. 2.  No reimbursement is required by this act pursuant to
Section 6 of Article XIIIB of the California Constitution because the
only costs that may be incurred by a local agency or school district
will be incurred because this act creates a new crime or infraction,
eliminates a crime or infraction, or changes the penalty for a crime
or infraction, within the meaning of Section 17556 of the Government
Code, or changes the definition of a crime within the meaning of
Section 6 of Article XIIIB of the California Constitution.