Senate Study Bill 3020 - Introduced SENATE FILE _____ BY (PROPOSED COMMITTEE ON COMMERCE BILL BY CHAIRPERSON WARNSTADT) A BILL FOR An Act requiring reasonable exceptions to insurance rates 1 for consumers whose credit information is influenced 2 by extraordinary life circumstances and providing an 3 applicability date. 4 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 5 TLSB 5137XC (4) 83 av/rj

S.F. _____ Section 1. Section 515.103, Code 2009, is amended by adding 1 the following new subsection: 2 NEW SUBSECTION . 5A. Extraordinary life circumstances. 3 a. An insurer authorized to do business in Iowa that uses 4 credit information to underwrite or rate risks for a policy of 5 personal insurance shall, on written request from a consumer, 6 provide reasonable exceptions to the insurer’s rates, rating 7 classifications, company or tier placement, or underwriting 8 rules or guidelines for a consumer who has experienced and 9 whose credit information has been directly influenced by any 10 of the following events: 11 (1) Catastrophic event, as declared by the federal or a 12 state government. 13 (2) Serious illness or injury, or serious illness or injury 14 to an immediate family member. 15 (3) Death of a spouse, child, or parent. 16 (4) Divorce or involuntary interruption of legally owed 17 alimony or support payments. 18 (5) Identity theft. 19 (6) Temporary loss of employment for a period of three 20 months or more, if such loss results from involuntary 21 termination of employment. 22 (7) Military deployment overseas. 23 (8) Other events, as determined by the insurer. 24 b. If a consumer submits a request for an exception as set 25 forth in paragraph “a” , an insurer may, in its sole discretion, 26 but is not required to, do any of the following: 27 (1) Require the consumer to provide reasonable written and 28 independently verifiable documentation of the event. 29 (2) Require the consumer to demonstrate that the event 30 had direct and meaningful impact on the consumer’s credit 31 information. 32 (3) Require such request to be made no more than sixty days 33 from the date of the application for insurance or the policy 34 renewal. 35 -1- LSB 5137XC (4) 83 av/rj 1/ 3

S.F. _____ (4) Grant an exception despite the fact that the consumer 1 did not provide the initial request for an exception in 2 writing. 3 (5) Grant an exception where the consumer asks for 4 consideration of repeated events or the insurer has considered 5 this event previously. 6 c. An insurer is not out of compliance with any law or rules 7 relating to underwriting, rating, or rate-filing as a result 8 of granting an exception under this subsection. Nothing in 9 this subsection shall be construed to provide a consumer or 10 other insured with a cause of action that does not exist in the 11 absence of this subsection. 12 d. An insurer shall provide notice to consumers that 13 reasonable exceptions are available pursuant to this subsection 14 and information about how the consumer may inquire further 15 about such exceptions. 16 e. Within thirty days of the insurer’s receipt of sufficient 17 documentation of an event described in paragraph “a” from a 18 consumer, the insurer shall inform the consumer of the outcome 19 of the consumer’s request for a reasonable exception. Such 20 communication shall be in writing or provided to a consumer 21 using the same medium as the request. 22 Sec. 2. APPLICABILITY DATE. This Act applies to personal 23 insurance contracts or policies delivered, issued for delivery, 24 continued, or renewed in this state on or after July 1, 2010. 25 EXPLANATION 26 This bill requires an insurer to provide reasonable 27 exceptions to the insurer’s rates, rating classifications, 28 company or tier placement, or underwriting rules or guidelines 29 upon the written request of an applicant for insurance or an 30 insured whose credit information has been directly influenced 31 by specified extraordinary life circumstances. An insurer 32 may require such a consumer to provide reasonable written and 33 independently verifiable documentation of the event and to 34 demonstrate the direct and meaningful impact of the event on 35 -2- LSB 5137XC (4) 83 av/rj 2/ 3

S.F. _____ the consumer’s credit information. 1 An insurer is required to inform the consumer of the outcome 2 of such a request within 30 days of receiving documentation of 3 an extraordinary event, in writing or in the same medium as the 4 request. Insurers are required to notify consumers that such 5 reasonable exceptions are available and how to inquire further 6 about them. 7 The bill applies to personal insurance contracts or policies 8 delivered, issued for delivery, continued, or renewed in this 9 state on or after July 1, 2010. 10 -3- LSB 5137XC (4) 83 av/rj 3/ 3