HB 359-FN – AS INTRODUCED
2011 SESSION
01/09
HOUSE BILL 359-FN
AN ACT prohibiting the use of certain information to underwrite insurance coverage.
SPONSORS: Rep. Hatch, Coos 3; Rep. Norelli, Rock 16
COMMITTEE: Commerce and Consumer Affairs
This bill makes it a discriminatory and unfair insurance trade practice to charge higher premiums for automobile and homeowners insurance based on credit rating. Current law allows the use of credit reports for such purposes if it is not the sole reason for higher premiums.
This bill also prohibits insurers from requesting certain information to underwrite casualty insurance coverage.
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Explanation: Matter added to current law appears in bold italics.
Matter removed from current law appears [in brackets and struckthrough.]
Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.
11-0285
01/09
STATE OF NEW HAMPSHIRE
In the Year of Our Lord Two Thousand Eleven
AN ACT prohibiting the use of certain information to underwrite insurance coverage.
Be it Enacted by the Senate and House of Representatives in General Court convened:
1 Unfair Insurance Trade Practice; Automobile Insurance and Homeowner Insurance. Amend RSA 417:4, VIII(g) to read as follows:
(g) Charging a higher premium for private passenger automobile or homeowner insurance [solely] on the basis of information obtained from a credit rating, a credit history, or a credit scoring model.
2 New Paragraph; Unfair Insurance Practices; Education Level; Occupation. Amend RSA 417:4 by inserting after paragraph XXIII the following new paragraph:
XXIV. EDUCATION LEVEL; OCCUPATION. Requesting education level or occupation and using such information to rate or underwrite casualty insurance.
3 Effective Date. This act shall take effect January 1, 2012.
LBAO
11-0285
12/15/10
HB 359-FN - FISCAL NOTE
AN ACT prohibiting the use of certain information to underwrite insurance coverage.
FISCAL IMPACT:
The Department of Insurance states this bill may increase state revenue, state expenditures, county expenditures and local expenditures by an indeterminable amount in FY 2012 and each year thereafter. There is no fiscal impact on county and local revenue.
METHODOLOGY:
The Department of Insurance states this bill prohibits the use of credit based information in the pricing of private passenger automobile or homeowners insurance based on credit rating and prohibits the use of an individual’s occupation to underwrite casualty insurance. The Department states the removal of the word “solely” would result in insurers not being able to use credit based information in the pricing of private passenger automobile and homeowners insurance which would result in increased pricing for many NH policyholders who now receive a pricing discount as a result of favorable credit information and result in a decrease in pricing for a smaller group of policyholders. The Department states any increase in premiums will generate higher premium tax; however the Department has no information to project any increase in premiums or resulting increase in tax revenue.
The prohibition on using a person’s occupation or type of work performed will negatively impact the establishment of premiums for Workers’ Compensation, commercial line of business and some personal automobile insurance. The Department states the use of a person’s occupation or type of work is a critical element used in establishing Workers’ Compensation premiums. Companies using a person’s occupation or type of work to establish premiums for Workers’ Compensation, commercial lines of business will likely experience an increase in costs leading to increases in premium rates. The Department has no data to project the fiscal impact but states an increase in premiums will result in an increase in premium tax revenue, and an increase in costs to state, county, and local governments to the extent the types of insurance bought by these entities is impacted by this bill.