LRB-0109/3
PJK:jld:rs
2011 - 2012 LEGISLATURE
April 21, 2011 - Introduced by Representatives Young, E. Coggs, Turner and
Grigsby. Referred to Committee on Insurance.
AB98,1,4
1An Act to amend 625.12 (1) (e), 625.12 (2), 625.15 (1) and 628.34 (3) (a); and
to
2create 632.06 and 632.367 of the statutes;
relating to: prohibiting the use of
3zip codes or information in credit reports for issuing or renewing, or setting
4premiums for, certain types of insurance.
Analysis by the Legislative Reference Bureau
Current law contains prohibitions against unfairly discriminating among
policyholders by charging different premiums or offering different terms of coverage
except on the basis of classifications related to the nature and degree of risk covered.
Current law also specifies the factors on which insurance rates may be based. These
prohibitions and specifications apply to all types of insurance. Current law
specifically prohibits an insurer from using odometer reading data collected in the
course of an emissions inspection as a factor in setting rates or premiums for motor
vehicle insurance.
This bill prohibits an insurer from considering information in an individual's
credit report when issuing or renewing motor vehicle insurance or renter's or
homeowner's (property) insurance, or when setting premiums for motor vehicle or
property insurance. The bill also prohibits an insurer from considering an
individual's zip code when issuing or renewing, or when setting premiums for, motor
vehicle insurance. In addition, the bill prohibits a rating plan for motor vehicle
insurance from using information in an individual's credit report or an individual's
zip code as a rating factor, and prohibits a rating plan for property insurance from
using information in an individual's credit report as a rating factor.
The people of the state of Wisconsin, represented in senate and assembly, do
enact as follows:
AB98, s. 1
1Section
1. 625.12 (1) (e) of the statutes is amended to read:
AB98,2,32
625.12
(1) (e) Subject to
s. ss. 632.06, 632.365
, and 632.367, all other relevant
3factors, including the judgment of technical personnel.
AB98, s. 2
4Section
2. 625.12 (2) of the statutes is amended to read:
AB98,2,135
625.12
(2) Classification. Risks may be classified in any reasonable way for
6the establishment of rates and minimum premiums, except that no classifications
7may be based on race, color, creed
, or national origin, and classifications in
8automobile insurance may not be based on physical condition or developmental
9disability as defined in s. 51.01 (5). Subject to
s.
ss. 632.06, 632.365
, and 632.367,
10rates thus produced may be modified for individual risks in accordance with rating
11plans or schedules that establish reasonable standards for measuring probable
12variations in hazards, expenses, or both. Rates may also be modified for individual
13risks under s. 625.13 (2).
AB98, s. 3
14Section
3. 625.15 (1) of the statutes is amended to read:
AB98,3,215
625.15
(1) Rate making. An insurer may itself establish rates and
16supplementary rate information for one or more market segments based on the
17factors in s. 625.12 and
, if the rates are for property insurance, subject to s. 632.06
18or, if the rates are for motor vehicle liability insurance, subject to
s. ss. 632.365
and
19632.367, or the insurer may use rates and supplementary rate information prepared
20by a rate service organization, with average expense factors determined by the rate
1service organization or with such modification for its own expense and loss
2experience as the credibility of that experience allows.
AB98, s. 4
3Section
4. 628.34 (3) (a) of the statutes is amended to read:
AB98,3,114
628.34
(3) (a) No insurer may unfairly discriminate among policyholders by
5charging different premiums or by offering different terms of coverage except on the
6basis of classifications related to the nature and the degree of the risk covered or the
7expenses involved, subject to ss.
632.06, 632.365,
632.367, 632.746
, and 632.748.
8Rates are not unfairly discriminatory if they are averaged broadly among persons
9insured under a group, blanket
, or franchise policy, and terms are not unfairly
10discriminatory merely because they are more favorable than in a similar individual
11policy.
AB98, s. 5
12Section
5. 632.06 of the statutes is created to read:
AB98,3,14
13632.06 Prohibited use of credit report information. (1) In this section,
14"property insurance" means renter's insurance and homeowner's insurance.
AB98,3,16
15(2) A rating plan for property insurance may not use information in an
16individual's credit report as a rating factor.
AB98,3,19
17(3) For determining whether to issue or renew coverage under a property
18insurance policy, or for setting premiums for coverage under such a policy, an insurer
19may not consider information in the credit report of any of the following:
AB98,3,2120
(a) An individual who is, or who if coverage is issued would be, a named insured
21under the policy.
AB98,3,2222
(b) The spouse or other family member of an individual under par. (a).
AB98, s. 6
23Section
6. 632.367 of the statutes is created to read:
AB98,4,3
1632.367 Prohibited use of zip code or credit report information. (1) A
2rating plan for motor vehicle insurance may not use as a rating factor information
3in an individual's credit report or the zip code of an individual's residence.
AB98,4,7
4(2) For determining whether to issue or renew coverage under a motor vehicle
5insurance policy, or for setting premiums for coverage under such a policy, an insurer
6may not consider the zip code of the residence, or information in the credit report, of
7any of the following:
AB98,4,98
(a) An individual who is, or who if coverage is issued would be, a named insured
9under the policy.
AB98,4,1010
(b) The spouse or other family member of an individual under par. (a).
AB98,4,1412
(1) This act first applies to motor vehicle insurance policies and property
13insurance policies that are renewed, or for which application is made, on the effective
14date of this subsection.
