S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   5285
 
                        2023-2024 Regular Sessions
 
                             I N  S E N A T E
 
                               March 1, 2023
                                ___________
 
 Introduced  by  Sens. PARKER, ADDABBO, KENNEDY -- read twice and ordered
   printed, and when printed to be committed to the Committee  on  Insur-
   ance
 
 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.
   § 2. The superintendent of financial services shall review the actuar-
 ial  methods and formulas currently utilized to determine auto insurance
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD07231-01-3
              

 S. 5285                             2
 
 premiums for New York consumers. Such review shall  include  a  determi-
 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.
   § 3. This act shall take effect on the one hundred twentieth day after
 it  shall have become a law. Effective immediately, the addition, amend-
 ment and/or repeal of any rules or regulations necessary for the  imple-
 mentation  of  the  provisions  of  this  act  on its effective date are
 authorized to be made and completed on or before such effective date.