S T A T E   O F   N E W   Y O R K
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                                  1128

                       2011-2012 Regular Sessions

                            I N  S E N A T E

                             January 5, 2011
                               ___________

Introduced  by  Sen.  PARKER -- 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  therefore  would  not  have the information they needed to exercise
responsible 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 residents 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

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD02150-01-1
              

S. 1128                             2

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 utilized he or she shall promulgate
amended rules and regulations which do not include  the  use  of  credit
scoring  methods. If the superintendent determines that such methods are
not 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.