S T A T E   O F   N E W   Y O R K
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                                  1587

                       2015-2016 Regular Sessions

                            I N  S E N A T E

                            January 13, 2015
                               ___________

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 financial services to  promulgate
  rules and regulations relating to excluding the use of "credit scores"
  in determining 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  financial services to promulgate any rules and regulations necessary
to prohibit the use of this method of calculating  risk  in  the  formu-
lation  of  auto insurance premiums on policies held by residents of New
York.
  S 2. The superintendent of financial services shall review the actuar-
ial methods and formulas currently utilized to determine auto  insurance
premiums  for  New  York consumers. Such review shall include a determi-

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD06845-01-5
              

S. 1587                             2

nation 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 such super-
intendent 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  such  superintendent determines that such
methods are not utilized, he or she shall  promulgate  rules  and  regu-
lations 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.