NY State Senate Bill 2021-S6456

Senate Bill S6456

2021-2022 Legislative Session

Prohibits automobile insurers from refusing to issue or renew an individual's policy based on such individual's credit history

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Archive: Last Bill Status - In Senate Committee Insurance Committee

Introduced
- In Committee Assembly
- In Committee Senate
- On Floor Calendar Assembly
- On Floor Calendar Senate
- Passed Assembly
- Passed Senate
Delivered to Governor
Signed By Governor

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Actions

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	Assembly Actions - Lowercase Senate Actions - UPPERCASE
Jan 05, 2022	referred to insurance
Apr 29, 2021	referred to insurance

co-Sponsors

2021-S6456 (ACTIVE) - Details

See Assembly Version of this Bill:: A7371
Current Committee:: Senate Insurance
Law Section:: Insurance Law
Laws Affected:: Amd §2801, add §2802-a, Ins L
Versions Introduced in 2023-2024 Legislative Session:: A795

2021-S6456 (ACTIVE) - Summary

Prohibits automobile insurers from refusing to issue or renew an individual's policy based on such individual's credit history.

2021-S6456 (ACTIVE) - Sponsor Memo

                                 
BILL NUMBER: S6456

SPONSOR: MAY
 
TITLE OF BILL:

An act to amend the insurance law, in relation to prohibiting automobile
insurers from refusing to issue or renew an individual's policy based on
such individual's credit history

 
PURPOSE:

Prohibits automobile insurers from refusing to issue or renew an indi-
vidual's policy based on such individual's credit history.

 
SUMMARY OF PROVISIONS:

Section 1: Definitions.

Section 2: Provides that insurers cannot refuse to issue an automobile
insurance policy to an applicant solely on the basis of such applicant's
credit information. Nor can an insurer's decision to renew an existing
automobile insurance policy be based solely on the insured's credit

information. Furthermore, when determining whether to renew an existing
automobile insurance policy, an insurer cannot request the insured's
credit information or credit report from a consumer reporting agency.

Section 3: Sets the effective date.

 
JUSTIFICATION:

Currently, New York State permits credit information to be a reason for
denial or non-renewal by an automobile insurer.

However, an automobile insurance applicant's credit information is a
socio-economic factor that has nothing to do with the applicant's driv-
ing ability. Many studies have demonstrated that the usage of credit
information in an application for automobile insurance can have a
disproportionate effect on minorities and low-income individuals that
have otherwise clean driving records.

This Bill seeks to limit the affect that an individual's credit history
can have on an application for automobile insurance. If adopted, an
individual's credit history cannot be the sole reason for the issuance,
renewal, or denial of an automobile insurance policy.  And during the
renewal process, an insurer cannot request an individual's credit infor-
mation or credit report from a consumer reporting agency.

 
FISCAL IMPACT ON THE STATE:

To be determined.

 
LEGISLATIVE HISTORY:

None

 
EFFECTIVE DATE:
This act shall take effect immediately.

2021-S6456 (ACTIVE) - Bill Text download pdf

                            
 
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   6456
 
                        2021-2022 Regular Sessions
 
                             I N  S E N A T E
 
                              April 29, 2021
                                ___________
 
 Introduced  by  Sen.  MAY  --  read  twice and ordered printed, and when
   printed to be committed to the Committee on Insurance
 
 AN ACT to amend the insurance law, in relation to prohibiting automobile
   insurers from refusing to issue or renew an individual's policy  based
   on such individual's credit history

   THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section 1. Subsections (c), (d), (f) and (g) of section  2801  of  the
 insurance  law, as added by chapter 215 of the laws of 2004, are amended
 and a new subsection (j) is added to read as follows:
   (c) "Applicant" shall mean an individual who has applied to be covered
 by a personal lines insurance policy OR AUTOMOBILE INSURANCE POLICY with
 an insurer.
   (d) "Consumer" shall mean an insured whose credit information is  used
 or  whose insurance score is calculated in the underwriting or rating of
 a personal lines insurance policy OR AUTOMOBILE INSURANCE POLICY, or  an
 applicant for such a policy.
   (f)  "Credit  information"  shall  mean any credit-related information
 derived from a credit report,  found  on  a  credit  report  itself,  or
 provided  on  an  application for personal lines insurance OR AUTOMOBILE
 INSURANCE. Information that is not credit-related shall not  be  consid-
 ered  "credit  information",  regardless of whether it is contained in a
 credit report or in an application, or is used to calculate an insurance
 score.
   (g) "Credit report" shall mean any written, oral,  or  other  communi-
 cation  of  information  by  a  consumer  reporting  agency bearing on a
 consumer's credit worthiness, credit standing or credit  capacity  which
 is  used or expected to be used or collected in whole or in part for the
 purpose of serving as a factor to  determine  personal  lines  insurance
 premiums,  AUTOMOBILE  INSURANCE  PREMIUMS, eligibility for coverage, or
 tier placement.

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

                                                            LBD10467-01-1

 S. 6456                             2
 
   (J) "AUTOMOBILE INSURANCE" SHALL MEAN A CONTRACT OF INSURANCE,  ISSUED
 OR  ISSUED  FOR DELIVERY IN THIS STATE, ON A RISK LOCATED OR RESIDENT IN
 THIS STATE, INSURING AGAINST LOSSES OR LIABILITIES ARISING  OUT  OF  THE
 OWNERSHIP,  OPERATION, OR USE OF A MOTOR VEHICLE, PREDOMINANTLY USED FOR
 NON-BUSINESS  PURPOSES, WHEN A NATURAL PERSON IS THE NAMED INSURED UNDER
 THE POLICY OF AUTOMOBILE INSURANCE; PROVIDED, HOWEVER, THAT THE  USE  OR
 OPERATION  OF  THE MOTOR VEHICLE BY A TRANSPORTATION NETWORK DRIVER AS A
 TNC VEHICLE IN ACCORDANCE WITH ARTICLE FORTY-FOUR-B OF THE  VEHICLE  AND
 TRAFFIC LAW SHALL NOT BE INCLUDED IN DETERMINING WHETHER THE MOTOR VEHI-
 CLE IS BEING USED PREDOMINANTLY FOR NON-BUSINESS PURPOSES.
   §  2.  The  insurance law is amended by adding a new section 2802-a to
 read as follows:
   § 2802-A. USE OF CREDIT INFORMATION; AUTOMOBILE INSURANCE. (A)  INSUR-
 ERS  SHALL  BE PROHIBITED FROM REFUSING TO ISSUE AN AUTOMOBILE INSURANCE
 POLICY TO ANY APPLICANT SOLELY ON THE BASIS OF SUCH  APPLICANT'S  CREDIT
 INFORMATION.
   (B)  INSURERS  SHALL  BE PROHIBITED FROM REFUSING TO RENEW AN EXISTING
 AUTOMOBILE INSURANCE POLICY SOLELY UPON THE BASIS OF THE NAMED INSURED'S
 CREDIT INFORMATION AND SHALL BE PROHIBITED FOR  THE  PURPOSE  OF  POLICY
 RENEWAL FROM REQUESTING SUCH NAMED INSURED'S CREDIT INFORMATION OR CRED-
 IT REPORT FROM A CONSUMER REPORTING AGENCY.
   § 3. This act shall take effect immediately.

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Senate Bill S6456

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Sponsored By

Rachel May