2019 Delaware Code
Title 18 - Insurance Code
Chapter 83. The Use of Credit Information in Personal Insurance [For applicability of this chapter, see 81 Del. Laws, c. 108, § 3]
§ 8304 Use of credit information [For applicability of this section, see 81 Del. Laws, c. 108, § 3].
(a) An insurer authorized to do business in Delaware that uses credit information to underwrite or rate risks, shall not do any of the following:
(1) Use an insurance score that is calculated using income, gender, sexual orientation, gender identity, education, address, zip code, race, ethnic group, religion, marital status, or nationality of the consumer as a factor.
(2) Deny, cancel or nonrenew a personal insurance policy solely on the basis of credit information, without consideration of any other applicable underwriting factor independent of credit information and not expressly prohibited by paragraph (a)(1) of this section.
(3) Base an insured’s renewal rates for personal insurance solely upon credit information, without consideration of any other applicable factor independent of credit information.
(4) Take an adverse action against a consumer solely because he or she does not have a credit card account, without consideration of any other applicable factor independent of credit information.
(5) Consider an absence of credit information or an inability to calculate an insurance score in underwriting or rating personal insurance, unless the insurer does 1 of the following:
a. Treats the consumer as otherwise approved by the Insurance Commissioner, if the insurer presents information that such an absence or inability relates to the risk for the insurer.
b. Treats the consumer as if the applicant or insured had neutral credit information, as defined by the insurer.
c. Excludes the use of credit information as a factor and uses only other underwriting criteria.
(6) Request credit information at renewal unless requested to do so by a consumer or the consumer’s agent. Upon the request of the insured, the insurer shall, at the time of a policy’s renewal or anniversary date, rerate the policy based upon a current credit report and give the insured the benefit of any improvement in the insured’s insurance score. No adverse underwriting decision may result from a rerating conducted pursuant to this paragraph. An insurer need not recalculate the insurance score or obtain the updated credit report of an insured more frequently than once in a 12-month period. This paragraph shall not apply if the insurer’s filed rating plan does not use any credit information for the purpose of rating renewals, including any residual effect from the use of credit information at initial underwriting. Regardless of the requirements of this paragraph, no insurer need obtain current credit information for an insured if 1 of the following applies:
a. The insurer is treating the consumer as otherwise approved by the Commissioner.
b. The policy is in the most favorably-priced tier of the insurer, within a group of affiliated insurers.
c. Credit was not used for underwriting or rating such insured when the policy was initially written.
(7) 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 policy of personal insurance:
a. Credit inquiries not initiated by the consumer or inquiries requested by the consumer for his or her own credit information.
b. Inquiries relating to insurance coverage, if so identified on a consumer’s credit report.
c. Collection accounts with a medical industry code, if so identified on the consumer’s credit report.
d. Multiple lender inquiries, if coded by the consumer reporting agency on the consumer’s credit report as being from the home mortgage industry and made within 30 days of one another, unless only 1 inquiry is considered.
e. Multiple lender inquiries, if coded by the consumer reporting agency on the consumer’s credit report as being from the automobile lending industry and made within 30 days of one another, unless only 1 inquiry is considered.
f. Bankruptcy adjudications more than 5 years from date of the credit report.
g. Suits and judgments whose date of entry are more than 5 years from the date of the credit report or that exceed the governing statute of limitations, whichever is the longer period.
h. Accounts placed for collection or charged to profits and loss more than 7 years from the date of the credit report.
i. Records of arrest, indictment, or conviction of crime where the date of disposition, release or parole is more than 7 years from the date of the credit report.
j. Any other adverse item or information which is more than 7 years from the date of the credit report.
k. The total available line of credit; however, an insurer may consider the total amount of outstanding debt in relation to the total available line of credit.
(8) Take an adverse action on a homeowners insurance policy based solely on the credit information of a spouse who has no title or ownership interest in the property to be insured and is not an applicant.
(b) If, as the result of any acquisition or transfer of all or part of a book of business of an agent, insurer, or broker, a policy is transferred from 1 insurer to another and rerated, the rerating shall be considered a rerating of the policy currently in force upon renewal subject to the restrictions and benefits set forth in paragraph (a)(6) of this section, above, provided that an insurer may offer a policyholder to rewrite the policy using credit and may, at the policyholder’s option, rewrite the policy using credit if it results in a lower premium for the policyholder.
81 Del. Laws, c. 108, § 1; 70 Del. Laws, c. 186, § 1.
