S T A T E   O F   N E W   Y O R K
________________________________________________________________________

                                  7297

                            I N  S E N A T E

                             March 29, 2010
                               ___________

Introduced  by  Sen. PERALTA -- read twice and ordered printed, and when
  printed to be committed to the Committee on Insurance

AN ACT to direct the superintendent of insurance to promulgate rules and
  regulations relating to excluding the use of "credit scores" in deter-
  mining auto insurance premiums

  THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
BLY, DO ENACT AS FOLLOWS:

  Section 1. Legislative intent. The legislature finds that the practice
of using "credit scores" to determine auto insurance premiums can result
in  premium  fluctuations that are difficult for consumers to manage. In
addition, consumers may not be aware of changes in their  credit  rating
and  therefor would not have information they needed to exercise respon-
sible control over a factor which could affect their insurance rates.
  The  legislature further finds that a "credit score" comes from infor-
mation contained in consumer credit reports and is considered along with
other motor vehicle and driving records to compute insurance risk  at  a
particular  point  in time. Insurance scoring is predicated on a statis-
tical correlation between personal money management and insurance  risk.
Insurance  scoring  is one of many factors which can be used to evaluate
risks and assign rates.
  Accordingly, the legislature finds that, since  it  is  a  calculation
that  is  one of many used actuarial calculations it need not be a deci-
sive factor. It is the purpose of this act to direct the  superintendent
of  insurance  to  promulgate  any  rules  and  regulations necessary to
prohibit the use of this method of calculating risk in  the  formulation
of auto insurance premiums on policies held by citizens of New York.
  S  2. The superintendent of insurance shall review the actuarial meth-
ods and formulas currently utilized to determine auto insurance premiums
for New York consumers. Such review shall  include  a  determination  of
whether  or  not  the  manner in which insurance premiums are determined
includes the use of  "credit  scores"  or  similar  means  of  utilizing
consumer  credit  reports to determine a statistical correlation between
personal money management and  insurance  risk.  If  the  superintendent
determines  that  such  methods  are  currently utilized he or she shall

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
              

                                                           LBD00655-01-9

S. 7297                             2

promulgate amended rules and regulations which do not include the use of
credit scoring methods. If the superintendent determines that such meth-
ods are not currently utilized, he or she  shall  promulgate  rules  and
regulations which prohibit the future use of credit scoring methods.
  S 3. This act shall take effect on the one hundred twentieth day after
it shall have become a law, provided, however, that effective immediate-
ly,  the  addition,  amendment and/or repeal of any rules or regulations
necessary for the implementation of the provisions of this  act  on  its
effective date is authorized and directed to be made and completed on or
before such effective date.