40-5104. Prohibited acts.
40-5104
40-5104. Prohibited acts.No insurer authorized to do business in the state of Kansaswhich uses credit information to underwrite or rate risks, shall:
(a) Use an insurance score that is calculated using income, address, zipcode, race, religion, color, sex, disability, national origin, ancestry ormarital status of the consumeras a factor.
(b) Without consideration of any other applicable underwriting factorindependent of credit information and not expressly prohibited by subsection(a), refuse to quote, deny, cancel or refuse to renew any policy of personalinsurance solely on the basis of credit information.
(c) Without consideration of any other applicable factor independent ofcredit information, base an insured's renewal rates for personal insurancesolely upon credit information.
(d) Without consideration of any other applicable factor independent ofcredit information, take an adverse action against a consumer solely becausesuch consumer does not have a credit card account.
(e) Consider an absence of credit information or an inability to calculate aninsurance score in underwriting or rating personal insurance, unless theinsurer does one of the following:
(1) Treat the consumer as if the applicant or insured had neutral creditinformation, as defined by the insurer; or
(2) exclude the use of credit information as a factor and use only otherunderwriting criteria.
(f) Take an adverse action against a consumer based on credit information,unless an insurer obtains and uses a credit report issued or an insurance scorecalculated within 90 days from the date the personal insurance policy is firstwritten or notice of renewal is issued.
(g) (1) Except as provided in paragraphs (2) and (3), use creditinformation unless not later than every 36 months following the last time thatthe insurer obtained current credit information for the insured, the insurerrecalculates the insurance score or obtains an updated credit report.
(2) The insurer shall:
(A) Re-underwrite and re-rate the consumer's personal insurance policy, atthe annual renewal of such policy, based upon a current credit report orinsurance score for such consumer, if requested by the consumer. Suchconsumer's current credit report or insurance score shall be used if the resultof the re-underwrite and re-rate reduces the consumer's rate. Such consumer'scurrent credit report or insurance score shall not be used to increase theconsumer's rate. The insurer shall not be found to be in violation of ratefilings by adjusting an insured's rate in accordance with this subparagraph.Nothing in this subparagraph shall require an insurer to recalculate aconsumer's insurance score or obtain the updated credit report of a consumermore frequently than once in a twelve-month period.
(B) Have the discretion to obtain current credit information upon anyrenewal before the 36 months, if consistent with such insurer'sunderwriting guidelines.
(3) No insurer shall be required to obtain current credit information for aninsured, if:
(A) The insured is in the most favorably-priced tier of the insurer, withina group of affiliated insurers. However, the insurer shall have the discretionto order such report, if consistent with such insurer's underwritingguidelines;
(B) credit was not used for underwriting or rating such insured when thepolicy was initially written. However, the insurer shall have the discretion touse credit for underwriting or rating such insured upon renewal, if consistentwith such insurer's underwriting guidelines; or
(C) The insurer re-evaluates the insured beginning no later than 36 monthsafter inception and thereafter based upon other underwriting or rating factors,excluding credit information.
(h) Use any of the following as a negative factor against a consumer in anyinsurance scoring methodology or in reviewing credit information for thepurpose of underwriting or rating a policy of personal insurance:
(1) Any credit inquiry not initiated by the consumer or any inquiry requestedby the consumer for such consumer's own credit information;
(2) any inquiry relating to insurance coverage, if so identified on aconsumer's credit report;
(3) any collection account with a medical industry code, if so identified onthe consumer's credit report; or
(4) any additional lender inquiry beyond the first such inquiry related tothe same loan purpose, if coded by the consumer reporting agency on theconsumer's credit report as being from the given loan industry and made within30 days of one another.
History: L. 2003, ch. 88, § 5; July 1.