An insurer of an individual or group policy that takes an underwriting action that adversely affects a subject of abuse on the basis of a medical condition that the insurer knows is abuse-related shall explain the reason for its action to the applicant or insured in writing and shall be able to demonstrate that its action:

(1)  Does not treat abuse status as a medical condition;

(2)  Is permissible by law and applies in the same manner and to the same extent to all applicants and the insured with a similar medical condition without regard to whether the condition or claims abuse-related; and

(3)  Is based on a determination, made in conformance with sound actuarial principles or related actual or reasonably anticipated experience, that there is a correlation between the medical condition and a material increase in insurance risk.