BILL NUMBER: SB 691	AMENDED
	BILL TEXT

	AMENDED IN ASSEMBLY  JUNE 11, 2003
	AMENDED IN SENATE  MAY 14, 2003

INTRODUCED BY   Senator Escutia

                        FEBRUARY 21, 2003

   An act to add Section 676.18 to the Insurance Code, relating to
credit history.


	LEGISLATIVE COUNSEL'S DIGEST


   SB 691, as amended, Escutia.  Credit history:  homeowner's
insurance.
   Existing law generally regulates the use of consumer credit
reports and prohibits insurers from canceling or failing to renew
homeowners' insurance for various reasons.
   This bill would  define "credit history" as any
communication by a consumer reporting agency of information bearing
on a consumer's credit-related characteristics, as specified, that is
used, expected to be used, or collected to determine insurance
premiums for homeowner's insurance.  The bill would prohibit an
insurer from (1) refusing to underwrite, canceling, or refusing to
renew a risk based, in whole or in part, on the credit history of an
applicant or insured; (2) rating a risk based, in whole or in part,
on the credit history of an applicant or insured in any manner; and
(3) requiring a particular payment plan based, in whole or in part,
on the credit history of the insured or applicant  
prohibit an insurer from using, in whole or in part, credit ratings,
credit reports, credit scoring models, or other related credit or
financial information as a basis to underwrite, rate, or determine a
placement in a particular payment plan for specified policies  .
   The bill would require the Insurance Commissioner to enforce
these provisions, as specified. 
   Vote:  majority.  Appropriation:  no.  Fiscal committee:  
no   yes  . State-mandated local program:  no.


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


  SECTION 1.  Section 676.18 is added to the Insurance Code, to read:
  
   676.18.  (a) For purposes of this section "credit history" means
any written, oral, or other communication of any 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
determining personal lines insurance premiums for coverage of loss,
damage, or legal liability described in paragraph (1), (2), or (3) of
subdivision (a) of Section 675, in Section 2071, or in a policy of
residential earthquake insurance, or determining eligibility for this
coverage.
   (b) An insurer may not do the following:
   (1) Refuse to underwrite, cancel, or refuse to renew a risk based,
in whole or in part, on the credit history of an applicant or
insured.
   (2) Rate a risk based, in whole or in part, on the credit history
of an applicant or insured in any manner, including, but not limited
to, the following:
   (A) The provision or removal of a discount.
   (B) Assigning the insured or applicant to a rating tier.
   (C) Placing an insured or applicant with an affiliated company.
   (3) Require a particular payment plan based, in whole or in part,
on the credit history of the insured or applicant.   
   678.18.  (a) Notwithstanding any other provision of law, an
insurer shall not use, in whole or in part, credit ratings, credit
reports, credit scoring models, or other related credit or financial
information, as a basis to underwrite, rate, or determine placement
in a particular payment plan, for policies that are subject to
Section 675.
   (b) The restriction established in subdivision (a) applies to, but
is not limited to, the following actions:
   (1) The declination, refusal to offer or sell, or refusal to issue
insurance coverage.
   (2) The termination, nonrenewal, cancellation or rescission of
insurance coverage.
   (3) The binding of coverage.
   (4) The placement of the policy with an affiliate or within a
rating tier or rate level.
   (5) The determination of the classification, base rate, or rate
factors including credits or surcharges.
   (6) The determination of eligibility for a particular insurance
coverage, product, or program.
   (c) The commissioner shall enforce this section pursuant to
Section 1861.14.