CHAPTER Ins 3300 INSURANCE SCORES

Statutory Authority: RSA 400-A:15; RSA 412:15 III; RSA 412:43 I; RSA 417:4 VIII. (g)

PART Ins 3301 USE OF INSURANCE SCORES

Ins 3301.01 Purpose. The purpose of this chapter is to specify the conditions that are required to be met before insurers can use insurance scores for underwriting or rating for private passenger automobile and homeowners insurance.

Source. #7658, eff 9-1-02; ss by #8052, eff 7-1-04

Ins 3301.02 Scope.

(a) This chapter shall apply to private passenger automobile and homeowners insurance. For the purposes of this chapter homeowners insurance shall include dwelling insurance for owner occupied one to 4 family buildings.

(b) This chapter shall apply to each property and casualty insurer that uses an insurance score for:

(1) Underwriting purposes, including declinations; or

(2) Rating purposes.

Source. #7658, eff 9-1-02; ss by #8052, eff 7-1-04

Ins 3301.03 Definitions.

(a) "Adverse action" means a denial or cancellation of, an increase in any charge for, or a reduction of or other adverse or unfavorable change in the terms of coverage or amount of any private passenger automobile or homeowners insurance.

(b) "Affiliated insurer" means an insurer that directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with another insurer.

(d) "Consumer reporting agency" means any person which, for monetary fees, dues or on a cooperative non-profit basis, regularly engages in whole or in part in the practice of assembling or evaluating consumer credit information or other information for the purpose of furnishing credit histories to third parties.

(e) "Control" means the direct or indirect possession of the power to direct, or cause the direction of, the management and business policies of an insurer, regardless of whether the power is exercised by:

(1) Ownership of voting securities or of securities convertible into voting securities;

(2) Contract, other than a commercial contract for goods or non-management services; or

(3) Any other means.

(f) "Consumer report" means a credit report or any other communication of any information by a consumer reporting agency that:

(1) Bears on a consumer’s creditworthiness, credit standing, or credit capacity; and

(2) Is used or collected or expected to be used or collected as a factor in establishing the consumer’s eligibility or rating for private passenger automobile or homeowners insurance.

(g) "Insurance score" means a score that is derived by utilizing data from an individual’s credit report in an algorithm, computer program, model, or other process that reduces the data to a numeric or alphabetical, or similar rating.

(h) "Producer" means a person or business entity licensed under RSA 402-J.

(i) "Rating" means the establishment of base rates, classification factors, modifications to rates or factors, or tier placement.

(j) "Tier" means a category within a single insurer or group of insurers into which insureds with similar risk characteristics are placed for purposes of determining a premium or rate.

Source. #7658, eff 9-1-02; ss by #8052, eff 7-1-04

PART Ins 3302 STANDARDS

Ins 3302.01 Written Standards.

(a) If an insurance score is used for the underwriting or rating of private passenger automobile or homeowners insurance, an insurer shall establish written standards for determining when to obtain an insurance score which prohibits obtaining an insurance score based in whole or in part on:

(1) Race;

(2) Color;

(3) Creed;

(4) Sex;

(5) Religion;

(6) National origin;

(7) Place of residency;

(8) Blindness; or

(9) Any other physical handicap or disability.

(b) The written standards shall prohibit the obtaining of an insurance score for any arbitrary, capricious, or unfairly discriminatory reason.

(c) The written standards shall require that the decision to obtain an insurance score be a stated component of a company's filed set of underwriting guidelines or rating rules.

Source. #7658, eff 9-1-02; ss by #8052, eff 7-1-04

PART Ins 3303 NOTICE TO INSURED

Ins 3303.01 Notice Requirements.

(a) Each consumer who makes an original application for private passenger automobile or homeowners insurance shall be provided with a notice by the insurer or its producer that the consumer’s insurance score is used for the underwriting or rating of such insurance, if the insurer uses an insurance score for those purposes.

(b) If the insurer uses an insurance score upon renewal of any private passenger automobile or homeowners insurance policy, for underwriting or rating purposes, the insured shall be provided notice of such fact by the insurer or its producer.

Source. #7658, eff 9-1-02; ss by #8052, eff 7-1-04

PART Ins 3304 FILING OF UNDERWRITING MODELS

Ins 3304.01 Underwriting Filing Required.

(a) If an insurer uses insurance scores to underwrite new or renewal private passenger motor vehicle or homeowners insurance business, its underwriting models shall be filed with the department in accordance with RSA 412:15 III and RSA 412:16.

(b) The filing shall include:

(1) The characteristics or factors of insurance scores used in the underwriting process; and

(2) The underwriting guidelines specifically related to the use of insurance scores by the insurer.

Source. #7658, eff 9-1-02; ss by #8052, eff 7-1-04

PART Ins 3305 RATE FILINGS

Ins 3305.01 Rate Filing Required.

(a) If an insurer uses an insurance score in rating new or renewal private passenger automobile or homeowners insurance business, its rates shall be filed with the department in accordance with RSA 412:15 III and RSA 412:16.

(b) The filing shall include:

(1) The insurance score criteria or parameters used in any rate calculation; and

(2) The numerical rating factors corresponding to (1) above.

Source. #7658, eff 9-1-02; ss by #8052, eff 7-1-04

PART Ins 3306 USE OF INSURANCE SCORES IN UNDERWRITING

Ins 3306.01 Underwriting Use of Scores.

(a) If an insurer uses insurance scores for the purpose of underwriting private passenger automobile or homeowners insurance, the insurance score shall be established and used in a manner that:

(1) Is not contrary to the provisions of RSA 417-A and RSA 417-B;

(2) Is not based wholly or partly on:

a. Race;

b. Color;

c. Creed;

d. Sex;

e. Religion;

f. National origin;

g. Place of residency;

h. Blindness; or

i. Any other physical handicap or disability.

(3) Is not arbitrary, capricious or unfairly discriminatory;

(4) Is in accordance with the company's filed set of underwriting guidelines; and

(5) Otherwise complies with this chapter and RSA 412 and RSA 417.

Source. #7658, eff 9-1-02; ss by #8052, eff 7-1-04

PART Ins 3307 USE OF INSURANCE SCORES IN RATEMAKING

Ins 3307.01 Ratemaking Insurance Score Use Standards.

(a) If an insurer uses an insurance score in rating private passenger automobile or homeowners insurance, use of insurance scores shall be established and used in a manner that:

(1) Does not result in rates that are excessive, inadequate, or unfairly discriminatory; and

(2) Otherwise complies with this rule and RSA 412:15 III and RSA 417:4 VIII (g).

(b) If an insurer uses an insurance score in rating private passenger automobile or homeowners insurance that insurer shall update the insurance score, with current credit information, at least every 36 months from the date the policy was issued to an insured. However, no insurer need obtain current credit information for an insured, if one of the following applies:

(1) The insurer is treating the consumer as otherwise approved by the commissioner;

(2) The insured is in the most favorably-priced tier of the insurer, within a group of affiliated insurers. However, the insurer shall have the discretion to order such report, if consistent with its underwriting guidelines;

(3) Credit was not used for underwriting or rating such insured when the policy was initially written. However, the insurer shall have the discretion to use credit for underwriting or rating such insured upon renewal, if consistent with its underwriting guidelines; and

(4) The insurer re-evaluates the insured beginning no later than 36 months after inception and thereafter based upon other underwriting or rating factors, excluding credit information.

Source. #7658, eff 9-1-02; ss by #8052, eff 7-1-04

PART Ins 3308 ADVERSE ACTION

Ins 3308.01 Adverse Action.

(a) If the insurer takes any adverse action with respect to any consumer that is based in whole or in part on an insurance score, the insurer shall:

(1) Provide oral, written or electronic notice of the adverse action to the consumer;

(2) Provide the name, address and telephone number of the consumer reporting agency, including a toll-free number established by the agency if the agency compiles and maintains files on consumers on a nationwide basis, that furnished the report to the insurer;

(3) Provide a statement that the consumer reporting agency did not make the decision to take the adverse action and is unable to provide the consumer the specific reasons why the adverse action was taken;

(4) Provide to the consumer an oral, written or electronic notice of the consumer’s rights to obtain a free copy of credit history from the consumer reporting agency or to file a dispute with the consumer reporting agency over the accuracy or completeness of any information in a credit history furnished by the agency.

(b) An insurer that takes any adverse action with respect to any consumer that is based in whole or in part on an insurance score, shall in addition to the requirements of (a) above, provide notification to the consumer explaining the reason for the adverse action. The notification shall:

(1) Be provided in sufficiently clear and specific language so that a person can identify that basis for the insurer's decision to take an adverse action;

(2) Include a description of up to 4 factors that were the primary influences of the adverse action;

(3) Avoid the use of generalized terms such as "poor credit history," "poor credit rating," or "poor insurance score"; and

(4) May rely upon standardized credit explanations provided by consumer reporting agencies or other third party vendors.

Source. #7658, eff 9-1-02; ss by #8052, eff 7-1-04

PART Ins 3309 ADDITIONAL CONSUMER PROTECTIONS

Ins 3309.01 Review of Action.

(a) If an insured believes that any adverse action taken by an insurer violates this chapter or the provisions of RSA 417:4, VIII(g); RSA 417-A or RSA 417-B, the insured may request in writing, within 10

days of receipt of the insurer’s or producer’s notice, that the commissioner review the action of the insurer.

(b) If an insurer shall receive confirmation of an inaccuracy in a credit history, it shall re-rate the applicable private passenger automobile or homeowners insurance policy effective retroactive to the effective date.

Source. #7658, eff 9-1-02; ss by #8052, eff 7-1-04

PART Ins 3310 REVIEW OF INSURANCE SCORING MODEL

Ins 3310.01 Submission of Basis for Insurance Score.

(a) An insurer or any other party shall submit to the commissioner an insurance scoring model intended to be relied upon in an underwriting model or rate filing. Such submission shall be made separately from the filing of underwriting or rating criteria.

(b) Such submission shall include statistical validation supporting the use of insurance scores in the rating process.

(1) Contrary to any provision of RSA 417-A or RSA 417-B;

(2) Based wholly or partly on:

a. Race;

b. Color;

c. Creed;

d. Sex;

e. Religion;

f. National origin;

g. Place of residency;

h. Blindness; or

i. Any other physical handicap or disability of an applicant or insured.

(3) Arbitrary, capricious or unfairly discriminatory; or

(4) In violation of this chapter or RSA 417:4 VIII (g).

(d) No insurer shall use an insurance scoring model in connection with underwriting or rating unless such insurance scoring model is filed with the commissioner in accordance with RSA 412:15 III and RSA 412:16.

Source. #7658, eff 9-1-02; ss by #8052, eff 7-1-04

Ins 3310.02 Confidentiality of Submission. Information submitted to the commissioner pursuant to this section shall be considered confidential and commercial information under RSA 91-A:5, and shall be treated as confidential by the commissioner pursuant to RSA 400-A:25.

Source. #7658, eff 9-1-02; ss by #8052, eff 7-1-04

APPENDIX

Regulation	Statute

Ins 3301.01	412:15 III; 412:43 I
Ins 3301.02	412:15 III; 412:43 I
Ins 3301.03	412:15 III; 412:43 I

Ins 3302.01	412:15 III; 412:43 I

Ins 3303.01	412:15 III; 412:43 I

Ins 3304.01	412:15 III; 412:16; 412:43 I

Ins 3305.01	412:15 III; 412:16; 412:43 I

Ins 3306.01	412:15 III; 412:43 I; 417-A; 417-B

Ins 3307.01	412:15; 412:43 I

Ins 3308.01	412:15 III; 412:27; 412:43 I

Ins 3309.01	412:15 III; 412:27; 412:43 I; 417-A; 417-B

Ins 3310.01	412:15 III; 412:16; 412:43 I; 417:4 VIII (g); 417-A; 417-B
Ins 3310.02	400-A:25; 412:15 III; 412:16 II; 412:43 I