A national insurer trade organization is praising the Kansas Legislature for passing legislation (HB 2501) that includes what the trade group says are positive changes to the state’s laws regarding the credit information in insurance scoring.
Provisions added to the bill will help insurance consumers by providing additional protections regarding the use of credit information, making credit checks on policy renewals voluntary and modifying when adverse action notices must be sent, according to the Property Casualty Insurers Association of America (PCI).
“This is an important victory for consumers,” said Joe Woods, vice present of state government affairs for PCI. “Kansas took their insurance scoring law and improved it by adding protections for individuals experiencing extraordinary life circumstances. The use of the National Conference of Insurance Legislators (NCOIL) model language for extraordinary life circumstances was instrumental in overcoming many of the concerns regarding the use of credit-based insurance scores.”
As introduced, HB2501 addressed mortgage guaranty insurance liability issues. During the legislative process lawmakers added provisions to the bill to include other insurance-related matters, including credit based insurance scoring.
Last year the Kansas House passed a bill to ban insurance scores. Since then, PCI and other insurance industry organizations worked to dispel misconceptions and help lawmakers understand how the use of credit information benefits consumers.
This dialogue led to the adoption of the NCOIL extraordinary life circumstance model as an alternative to banning the use of credit. Such circumstances include: a declared catastrophic event serious illness or injury to the insured or the insured’s immediate family; death of an insured’s spouse, child or parent; identity theft; and other factors.
Additionally the legislation was expanded to remove the mandatory rerun of an insured’s credit every thirty six months and the removal of the phrase “best possible rate” from the adverse action trigger language.
The bill has been sent to Gov. Mark Parkinson for his signature.
Source: PCI, Kansas Legislature
Topics Legislation Kansas
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