Legislature(2017 - 2018)

2017-03-24 House Journal

Full Journal pdf

2017-03-24                     House Journal                      Page 0731
HB 195                                                                                                                        
HOUSE BILL NO. 195 by the House Rules Committee by request of                                                                   
the Governor, entitled:                                                                                                         
     "An Act relating to insurer actions based on credit history and                                                            
     insurance scores at insurance policy renewal; and providing for                                                            
     insurer consideration of consumer requests for exceptions of credit                                                        
     history or insurance scores."                                                                                              
was read the first time and referred to the Labor & Commerce                                                                    
The following fiscal note(s) apply:                                                                                             
1.  Zero, Dept. of Commerce, Community, & Economic Development                                                                  
The Governor's transmittal letter dated March 22 follows:                                                                       
"Dear Speaker Edgmon:                                                                                                           
Under the authority of Article III, Section 18 of the Alaska                                                                    
Constitution, I am transmitting a bill relating to an insurer's use of a                                                        
consumer's credit history or insurance score upon renewal of an                                                                 
insurance policy.                                                                                                               
This bill makes changes to the Alaska Insurance Code to allow an                                                                
insurer to use a consumer's credit history or insurance score for policy                                                        
renewals. Under the current law, an insurer cannot use a consumer's                                                             
credit history or insurance score when renewing a policy, unless the                                                            

2017-03-24                     House Journal                      Page 0732
consumer affirmatively waives the prohibition on the use of credit                                                              
history at renewal.                                                                                                             
Last year a similar bill came to my desk which I vetoed, due to the                                                             
lack of adequate protections for Alaskan consumers. While this bill is                                                          
similar in concept, it adds the protections I found lacking in last year's                                                      
legislation. If passed, this legislation would give an insurer the ability                                                      
to take into consideration a consumer's credit history or insurance                                                             
score at the time of renewal. However, there are many consumer                                                                  
protections that have been added.                                                                                               
This bill requires insurers to provide written notification to consumers                                                        
if their insurance rate will be negatively affected due to their credit                                                         
score. In the notification to the consumer, the insurer must provide                                                            
information regarding extraordinary life circumstance exceptions and                                                            
instruct the consumer regarding how to request an exception. In                                                                 
addition to the specific circumstances listed, this legislation adds                                                            
language allowing consumers who feel their life circumstances                                                                   
warrant an exception, to request one in writing, even if it is not                                                              
specifically listed on the insurer's list of exceptions.                                                                        
This legislation further protects consumers by establishing an appeal                                                           
process for consumers who believe their requests for an extraordinary                                                           
life circumstance exception have been wrongfully denied by an                                                                   
insurer. The appeal process designates the State's Division Director of                                                         
Insurance as the final decision maker on consumer appeals under the                                                             
extraordinary life circumstances and requires a decision be made                                                                
within 30 days after receipt of the appeal. The appeal process included                                                         
in this legislation implements safeguards for consumers by ensuring                                                             
the final decision does not rest with the insurer and requires timely                                                           
action so as not to adversely affect the consumer.                                                                              
Additionally, this bill adds provisions stating that an insurer may not                                                         
fail to renew a policy based on a consumer's lack of credit history and                                                         
prohibits the use of a credit score that is more than 90 days old.                                                              
Furthermore, this bill would require insurers that use a consumer's                                                             
credit history to underwrite or rate a policy to re-underwrite or re-rate                                                       
a policy no later than every 24 months, allowing consumers to reap the                                                          
benefits of an improved credit score.                                                                                           

2017-03-24                     House Journal                      Page 0733
This bill clarifies that the definition of an "adverse action" is limited to                                                    
the definition under the Fair Credit Reporting Act.                                                                             
I urge your prompt and favorable action on this measure.                                                                        
Bill Walker