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History
- Referred to insurance
Companion bill
The same bill in the other chamber. A bill becomes law when one version passes both houses and the governor signs it, so either number can carry it.
Requires commercial lines insurers to provide notice to consumers when credit information is used in the rating or underwriting of such insurance
In Assembly Committee · Insurance · Sponsor Peter Rivera
Full text
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Sponsor's memo
Title of bill
An act to amend the insurance law, in relation to use of credit information for commercial lines insurance
Purpose or general idea of bill
Requires commercial lines insurers to provide notice to consumers when credit information is used in the rating or underwriting of such insurance.
Summary of specific provisions
Section 1: Amends Insurance Law section 2801 to add two new sub-sections (j) and (k) to define "commercial lines insurance" and "commercial lines insurance consumer".
Section 2: Amends Insurance Law section 2809 to clarify which sections of the law are applicable and to renumber it section 2810.
Section 3: Adds Insurance Law section 2809 to require commercial lines insurers to provide notice to consumers when credit information is used in the rating or underwriting of such insurance.
Section 4 makes the act take effect on the 120th day after it shall have become law.
Justification
Article 28 of the Insurance Law was added by Chapter 215 of the Laws of 2004. It is based on a model act of the National Conference of Insurance Legislators. It codified in state insurance law the requirements of the federal Fair Credit Reporting Act, which requires certain notices to be provided to "consumers" when their credit is used in connection with underwriting or rating personal lines insurance.
Increasingly, the credit history of individuals is also being accessed and used by insurance companies in underwriting commercial lines of insurance. This is especially true of small businesses. The credit information of a sole proprietor or partner may now affect the ability of such businesses to secure insurance and the rates they pay.
Under current law, many of the credit history provisions only apply to personal lines insurance. This bill would provide some of the same protections now found in Article 28 to such individuals for personal lines insurance to also include commercial lines insurance.
Specifically, if an individual's credit information is used, the insurer would be required to notify the person of this fact. Further, if the insurer makes an adverse decision based on the individual's credit information, the individual must be given notice of such action and the reasons and the source of the credit-related information that formed the basis for the insurer's action.
Prior legislative history
2006 - A.10188 - Insurance Committee 2007-2008 - A.6822 - Insurance Committee
Fiscal implications for state and local governments
None.
Effective date
This bill shall become effective on the one hundred twentieth day after it shall have become a law and shall apply to policies issued and/or renewed on or after such date.
Summaries, headlines and scores are AI-generated from the official bill text. How we score bills. Source: NYS Open Legislation.