Kansas Statutes 40-5104. Prohibited acts
Terms Used In Kansas Statutes 40-5104
- Adverse action: means any of the following in connection with the underwriting of personal insurance:
(1) A denial or cancellation of coverage; or
(2) a reduction or other adverse or unfavorable change in the terms of coverage of any insurance regardless of whether such insurance is in existence or has been applied for. See Kansas Statutes 40-5103
- Applicant: means an individual who has applied to an insurer to be covered by a personal insurance policy. See Kansas Statutes 40-5103
- 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. See Kansas Statutes 40-5103
- Consumer reporting agency: means any person which, 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 on consumers for the purpose of furnishing consumer reports to third parties. See Kansas Statutes 40-5103
- Credit information: means any credit related information derived from a credit report, found on a credit report itself, or provided on an application for personal insurance. See Kansas Statutes 40-5103
- Credit report: A detailed report of an individual's credit history prepared by a credit bureau and used by a lender in determining a loan applicant's creditworthiness. Source: OCC
- Credit report: means any written, oral, or other communication of information by a consumer reporting agency bearing on a consumer's credit worthiness, credit standing or credit capacity which is used or expected to be used or collected in whole or in part for the purpose of serving as a factor to determine personal insurance premiums, eligibility for coverage, or tier placement. See Kansas Statutes 40-5103
- 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 an individual applicant or insured. See Kansas Statutes 40-5103
- Personal insurance: means private passenger automobile, homeowners, motorcycle, mobile homeowners and non-commercial dwelling fire insurance policies and boat, personal water craft, snowmobile and recreational vehicle policies. See Kansas Statutes 40-5103
- State: when applied to the different parts of the United States, includes the District of Columbia and the territories. See Kansas Statutes 77-201
No insurer authorized to do business in the state of Kansas which uses credit information to underwrite or rate risks, shall:
(a) Use an insurance score that is calculated using income, address, zip code, race, religion, color, sex, disability, national origin, ancestry or marital status of the consumer as a factor.
(b) Without consideration of any other applicable underwriting factor independent of credit information and not expressly prohibited by subsection (a), refuse to quote, deny, cancel or refuse to renew any policy of personal insurance solely on the basis of credit information.
(c) Without consideration of any other applicable factor independent of credit information, base an insured’s renewal rates for personal insurance solely upon credit information.
(d) Without consideration of any other applicable factor independent of credit information, take an adverse action against a consumer solely because such consumer does not have a credit card account.
(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) Treat the consumer as if the applicant or insured had neutral credit information, as defined by the insurer; or
(2) exclude the use of credit information as a factor and use only other underwriting criteria.
(f) Take an adverse action against a consumer based on credit information, unless an insurer obtains and uses a credit report issued or an insurance score calculated within 90 days from the date the personal insurance policy is first written or notice of renewal is issued.
(g) (1) The insurer shall:
(A) Re-underwrite and re-rate the consumer’s personal insurance policy, at the annual renewal of such policy, based upon a current credit report or insurance score for such consumer, if requested by the consumer. Such consumer’s current credit report or insurance score shall be used if the result of the re-underwrite and re-rate reduces the consumer’s rate. Such consumer’s current credit report or insurance score shall not be used to increase the consumer’s rate. The insurer shall not be found to be in violation of rate filings by adjusting an insured’s rate in accordance with this subparagraph. Nothing in this subparagraph shall require an insurer to recalculate a consumer’s insurance score or obtain the updated credit report of a consumer more frequently than once in a twelve-month period.
(B) Have the discretion to obtain current credit information upon any renewal before the 36 months, if consistent with such insurer’s underwriting guidelines.
(2) No insurer shall be required to obtain current credit information for an insured, if:
(A) 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 such insurer’s underwriting guidelines;
(B) 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 such insurer’s underwriting guidelines; or
(C) 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.
(h) Use any of the following as a negative factor against a consumer in any insurance scoring methodology or in reviewing credit information for the purpose of underwriting or rating a policy of personal insurance:
(1) Any credit inquiry not initiated by the consumer or any inquiry requested by the consumer for such consumer’s own credit information;
(2) any inquiry relating to insurance coverage, if so identified on a consumer’s credit report;
(3) any collection account with a medical industry code, if so identified on the consumer’s credit report; or
(4) any additional lender inquiry beyond the first such inquiry related to the same loan purpose, if coded by the consumer reporting agency on the consumer’s credit report as being from the given loan industry and made within 30 days of one another.