ASSEMBLY, No. 747

STATE OF NEW JERSEY

213th LEGISLATURE

 

PRE-FILED FOR INTRODUCTION IN THE 2008 SESSION

 


 

Sponsored by:

Assemblyman VINCENT PRIETO

District 32 (Bergen and Hudson)

Assemblyman JOSEPH VAS

District 19 (Middlesex)

 

 

 

 

SYNOPSIS

     Prohibits use of credit information by property-casualty insurers in formulating underwriting rules.

 

CURRENT VERSION OF TEXT

     Introduced Pending Technical Review by Legislative Counsel

  


An Act concerning use of credit information by certain insurers in formulating underwriting rules.

 

     Be It Enacted by the Senate and General Assembly of the State of New Jersey:

 

     1.  a.  No insurer admitted or authorized to transact property and casualty insurance business in this State shall establish or use underwriting rules that consider information obtained from a consumer report or a credit score as a factor in determining: premium rates; whether to decline or terminate a risk; or whether to limit the amount or type of coverage.

     b.  As used in this section:

     "Consumer report" means any written, oral or other communication of any information by a consumer reporting agency bearing on a consumer's credit worthiness, credit standing, credit capacity, character, general reputation, personal characteristics or mode of living which is used or expected to be used or collected in whole or in part for the purpose of serving as a factor in establishing the consumer's eligibility for credit or insurance.

     "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 the purpose of furnishing consumer reports to third parties, and which uses any means or facility for the purpose of preparing or furnishing consumer reports.

     "Credit score" means a numerical value or categorization derived from a statistical tool or modeling system used to predict the likelihood of certain credit behaviors.

 

     2.  This act shall take effect on the 90th day after enactment.

 

 

STATEMENT

 

     This bill prohibits property and casualty insurers doing business in New Jersey from using information from an individual's consumer report or credit score as an underwriting factor in determining the individual's premium rate, whether to decline or terminate an individual's coverage, or whether to limit the amount or type of coverage.

     The bill defines "consumer report" as any written, oral or other communication of any information by a consumer reporting agency bearing on a consumer's credit worthiness, credit standing, credit capacity, character, general reputation, personal characteristics or mode of living which is used or expected to be used or collected in whole or in part for the purpose of serving as a factor in establishing the consumer's eligibility for credit or insurance.  The term "credit score" is defined as a numerical value or categorization derived from a statistical tool or modeling system used to predict the likelihood of certain credit behaviors.

     Because it is unclear whether credit information is being properly utilized by insurers, this bill prohibits insurers from using that information in the underwriting process.