2009 Iowa Code
Title 13 - Commerce
Subtitle 1 - Insurance and Related Regulation
CHAPTER 515 - INSURANCE OTHER THAN LIFE
515.103 - USE OF CREDIT INFORMATION -- PERSONAL INSURANCE.

        515.103  USE OF CREDIT INFORMATION -- PERSONAL
      INSURANCE.
         1.  Definitions.  As used in this section unless the context
      otherwise requires:
         a.  "Adverse action" means a denial of issuance, cancellation,
      or refusal to renew, an increase in any charge for, or a reduction or
      other unfavorable change in the terms of coverage or amount of any
      personal insurance existing or applied for, or in connection with the
      underwriting of personal insurance.
         b.  "Affiliate" means any company that controls, is controlled
      by, or is under common control with another company.
         c.  "Applicant" means an individual who has applied to be
      covered by a personal insurance policy with an insurer.
         d.  "Consumer" means an insured whose credit information is
      used or whose insurance score is calculated in the underwriting or
      rating of a personal insurance policy or an applicant for such a
      personal insurance policy.
         e.  "Consumer reporting agency" means any person that, for
      monetary fees, dues, or on a cooperative nonprofit basis, regularly
      engages in whole or in part in the practice of assembling or
      evaluating consumer credit information or other information
      concerning consumers for the purpose of furnishing consumer credit
      reports to third parties.
         f.  "Credit information" means any information related to
      credit that is contained in or derived from a credit report, or
      provided in an application for personal insurance.  Information that
      is not related to credit shall not be considered "credit information"
      regardless of whether the information is contained in or derived from
      a credit report or an application for credit or is used to calculate
      an insurance score.
         g.  "Credit report" means any written, oral, or other
      communication of information by a consumer reporting agency that
      relates to a consumer's creditworthiness, credit standing, or credit
      capacity and that is used or expected to be used or is collected, in
      whole or in part, for the purpose of serving as a factor in
      determining personal insurance premiums, eligibility for personal
      insurance coverage, or tier placement.
         h.  "Insurance score" means a number or rating that is derived
      from an algorithm, computer application, model, or other process that
      is based in whole or in part on credit information for the purposes
      of predicting the future insurance loss exposure of a consumer.
         i.  "Insured" means an individual who is covered by a personal
      insurance policy.
         j.  "Personal insurance" means personal insurance and not
      commercial insurance and is limited to private passenger automobile,
      homeowners, farm owners, personal farm liability, motorcycle, mobile
      home owners, noncommercial dwelling fire, boat, personal watercraft,
      snowmobile, and recreational vehicle insurance policies, that are
      individually underwritten for personal, family, farm, or household
      use.  No other type of insurance is included as personal insurance
      for the purposes of this section.
         2.  Use of credit information.  An insurer authorized to do
      business in Iowa that uses credit information to underwrite or rate
      risks for a policy of personal insurance shall not do any of the
      following:
         a.  Use an insurance score that is calculated using income,
      gender, address, zip code, ethnic group, religion, marital status,
      race, or nationality of a consumer as a factor.
         b.  Deny issuance, cancel, or refuse to renew a policy of
      personal insurance solely on the basis of credit information, without
      consideration of any other applicable underwriting factors
      independent of credit information that are not otherwise prohibited
      under paragraph "a".
         c.  Base a consumer's renewal rates for personal insurance
      solely on the basis of credit information, without consideration of
      any other applicable underwriting factors independent of credit
      information that are not otherwise prohibited under paragraph
      "a".
         d.  Take adverse action against a consumer solely because the
      consumer does not have a credit card account, without consideration
      of any other applicable underwriting factors independent of credit
      information that are not otherwise prohibited under paragraph
      "a".
         e.  Consider an absence of credit information or an inability
      to calculate an insurance score in underwriting or rating personal
      insurance unless the insurer does one of the following:
         (1)  Treats the consumer as if the consumer has neutral credit
      information, as defined by the insurer.
         (2)  Excludes the use of credit information as an underwriting
      factor and only uses other underwriting criteria.
         f.  Take adverse action against a consumer based on credit
      information, unless the insurer obtains and uses a credit report
      issued or an insurance score calculated within ninety days before the
      date a personal insurance policy is first written or a renewal is
      issued.
         g.  Use credit information unless not later than every
      thirty-six months following the last time that the insurer obtained
      current credit information for the insured, the insurer recalculates
      the insurance score or obtains an updated credit report for the
      insured.  Regardless of the requirements of this paragraph:
         (1)  At annual renewal, upon the request of the consumer or the
      consumer's agent, the insurer shall re-underwrite and re-rate the
      personal insurance policy based upon a current credit report or
      insurance score.  An insurer is not required to recalculate an
      insurance score or obtain a current credit report more than once in a
      twelve-month period.
         (2)  The insurer shall have the discretion to obtain current
      credit information for a consumer more frequently than every
      thirty-six months, if consistent with the insurer's underwriting
      guidelines.
         (3)  Notwithstanding subparagraph (1), an insurer is not required
      to obtain current credit information for a consumer if any of the
      following applies:
         (a)  The insurer is treating the consumer as otherwise approved by
      the commissioner of insurance.
         (b)  The consumer is in the most favorably priced tier of the
      insurer, within a group of affiliated insurers.  However, the insurer
      shall have the discretion to obtain current credit information, if
      consistent with the insurer's underwriting guidelines.
         (c)  Credit information was not used for underwriting or rating
      the insured when the personal insurance policy was initially written.
      However, the insurer shall have the discretion to use current credit
      information for underwriting or rating the insured upon renewal of
      the policy, if consistent with the insurer's underwriting guidelines.

         (d)  The insurer reevaluates the insured beginning no later than
      thirty-six months after the personal insurance policy was initially
      written and thereafter, based on other underwriting or rating
      factors, excluding credit information.
         h.  Use any of the following as a negative factor in any
      insurance scoring methodology or in reviewing credit information for
      the purpose of underwriting or rating a personal insurance policy:
         (1)  Credit inquiries not initiated by the consumer or inquiries
      requested by the consumer for the consumer's own credit information.

         (2)  Inquiries relating to insurance coverage, if so identified on
      a consumer's credit report.
         (3)  Collection accounts with a medical industry code, if so
      identified on a consumer's credit report.
         (4)  Multiple lender inquiries, if coded by a consumer reporting
      agency on the consumer's credit report as being from the home
      mortgage industry and made within thirty days of one another, unless
      only one inquiry is considered.
         (5)  Multiple lender inquiries, if coded by a consumer reporting
      agency on the consumer's credit report as being from the automobile
      lending industry and made within thirty days of one another, unless
      only one inquiry is considered.
         3.  Dispute resolution and error correction.  If it is
      determined through the dispute resolution process set forth under the
      federal Fair Credit Reporting Act, 15 U.S.C. § 1681i(a)(5), that the
      credit information of a current insured is incorrect or incomplete
      and the insurer receives notice of such determination from either the
      consumer reporting agency or from the insured, the insurer shall
      re-underwrite and re-rate the insured within thirty days of receiving
      the notice.  After re-underwriting or re-rating the insured, the
      insurer shall make any adjustments necessary, consistent with the
      insurer's underwriting and rating guidelines.  If an insurer
      determines that an insured has overpaid the premium on a personal
      insurance policy, the insurer shall refund the amount of the
      overpayment to the insured, calculated for either the last twelve
      months of coverage or the actual policy period, whichever is shorter.

         4.  Initial notification.
         a.  If an insurer writing personal insurance uses credit
      information in underwriting or rating a consumer, the insurer or the
      insurer's agent shall disclose, either on the insurance application
      or at the time that the insurance application is taken, that the
      insurer may obtain credit information of the consumer in connection
      with the application.  Such disclosure to a consumer shall either be
      written or provided in the same medium as the application for
      insurance.  An insurer is not required to provide the disclosure
      statement required under this subsection to a consumer in connection
      with the renewal of a personal insurance policy if the consumer has
      previously been provided with such a disclosure statement.
         b.  An insurer that uses the following statement of disclosure
      shall be deemed to be in compliance with this subsection:

         "In connection with this application for insurance, we may review
      your credit report or obtain or use a credit-based insurance score
      based on the information contained in that credit report.  We may use
      a third party in connection with the development of your insurance
      score."

         5.  Notification of adverse action.  If an insurer takes
      adverse action against a consumer based on credit information, the
      insurer shall do all of the following:
         a.  Provide notification to the consumer that adverse action
      has been taken, in accordance with the requirements of the federal
      Fair Credit Reporting Act, 15 U.S.C. § 1681m(a).
         b.  Provide notification to the consumer explaining the
      reasons for the adverse action taken.  Such notice shall give reasons
      for the adverse action taken in language that is sufficiently clear
      and specific so that a person can identify the basis for the
      insurer's decision to take adverse action.  Such notification shall
      include a description of up to four factors that were the primary
      influences for the adverse action taken.  The use of generalized
      terms such as "poor credit history", "poor credit rating", or "poor
      insurance score" does not meet the explanation requirements of this
      paragraph.  Standardized credit explanations that are provided by
      consumer reporting agencies or other third-party vendors are deemed
      to comply with this paragraph.
         6.  Information filed with the commissioner of insurance.
         a.  An insurer that uses insurance scores to underwrite and
      rate risks for personal insurance shall file the insurer's scoring
      models or other scoring processes with the commissioner of insurance.
      A third party may file scoring models on behalf of an insurer.
      Information filed with the commissioner that includes insurance
      scoring models may include information including loss experience that
      justifies the insurer's use of credit information.
         b.  Information filed with the commissioner of insurance
      pursuant to this subsection shall be considered a confidential record
      and be recognized and protected as a trade secret pursuant to section
      22.7, subsection 3.
         7.  Indemnification.  An insurer shall indemnify, defend, and
      hold harmless agents or producers of the insurer from and against all
      liability, fees, and costs, arising out of or relating to the
      actions, errors, or omissions of an agent or producer who obtains or
      uses credit information or insurance scores on behalf of an insurer,
      provided that the agent or producer follows the instructions or
      procedures established by the insurer and complies with any
      applicable law or regulation.  This subsection shall not be construed
      to provide a consumer or other insured with a cause of action that
      does not exist in the absence of this subsection.
         8.  Consumer reporting agency -- sale of credit information.
         a.  A consumer reporting agency shall not provide or sell data
      or lists that include any information that was submitted, in whole or
      in part, in conjunction with an insurance inquiry about a consumer's
      credit information or a request for a credit report or insurance
      score.  Such information includes, but is not limited to, the
      expiration dates of an insurance policy or any other information that
      can be used to identify the expiration date of a consumer's insurance
      policy or the terms and conditions of the consumer's insurance
      coverage.
         b.  This subsection does not apply to the provision of
      information, including data or lists, by a consumer reporting agency
      to the agent or producer from whom the information was received, to
      the insurer on whose behalf the agent or producer acted, or to the
      insurer's affiliates or holding companies.
         c.  This subsection shall not be construed to restrict an
      insurer from obtaining a claims history report or a motor vehicle
      report of a consumer.
         9.  Severability.  If any subsection, paragraph, sentence,
      clause, phrase, or any other part of this section is declared invalid
      due to an interpretation of or a future change in the federal Fair
      Credit Reporting Act, the remaining subsections, paragraphs,
      sentences, clauses, phrases, or parts thereof shall be in no manner
      affected thereby but shall remain in full force and effect.
         10.  Applicability date.  This section applies to personal
      insurance contracts or policies delivered, issued for delivery,
      continued, or renewed in this state on or after October 1, 2004.  

         2004 Acts, ch 1039, §1; 2004 Acts, ch 1175, §341
         C2005, § 515.109A
         2005 Acts, ch 3, §83, 84; 2007 Acts, ch 152, § 28
         CS2007, § 515.103