The American Insurance Association commended New Mexico Gov. Bill Richardson (D) for signing into law this week SB 560, the Personal Insurance Credit Information Act. The bill was passed by the legislature on March 19.
“By signing this bill, Gov. Richardson has ensured that the personal information of New Mexican consumers will be protected,” said Fred Bosse, AIA vice president, southwestern region. “This new law also ensures that consumers will continue to have plenty of choices in terms of auto and homeowners insurance products, as well as insurance companies,” Bosse added.
SB 560 will provide New Mexico with some of the strongest consumer safeguards in the country that go beyond similar laws adopted in other states and are based on recommendations from the New Mexico Credit Scoring Task Force, a coalition of consumer and business groups established by the New Mexico Insurance Division.
These safeguards include the following:
• Insurance companies cannot deny, cancel or fail to renew coverage, or base a consumer’s placement on the basis of credit information or an insurance score without consideration of other underwriting factors permitted by state law;
• Insurance companies cannot consider an absence of credit information or an inability to determine credit information, except under certain circumstances; and
• Insurance companies must take into consideration “extraordinary life circumstances,” such as certain medical conditions, illness, injury or disease, divorce, the death of a spouse, child, or parent, involuntary loss of employment for more than three consecutive months, identity theft, a loss that makes a home uninhabitable, and other circumstances prescribed by the Superintendent of the New Mexico Insurance Division.
The new law becomes effective on January 1, 2006.
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