Chapter 0788

Chapter 788 Oregon Laws 2003

AN ACT

SB 260

Relating to use of consumer credit information by insurers; creating new provisions; and amending ORS 746.600 and 746.650.

Be It Enacted by the People of the State of Oregon:

SECTION 1. ORS 746.600 is amended to read:

746.600. As used in ORS 746.600 to 746.690 [and 750.055]:

(1)(a) “Adverse underwriting decision” means[, except as provided in subsection (2) of this section,] any of the following actions with respect to insurance transactions involving insurance coverage [which] that is individually underwritten:

[(a)] (A) A declination of insurance coverage.

[(b)] (B) A termination of insurance coverage.

[(c)] (C) Failure of an agent to apply for insurance coverage with a specific insurer [which] that the agent represents and [which] that is requested by an applicant.

[(d)] (D) In the case of life or health insurance coverage, an offer to insure at higher than standard rates.

[(e)] (E) In the case of other kinds of insurance coverage:

[(A)] (i) Placement by an insurer or agent of a risk with a residual market mechanism, an unauthorized insurer or an insurer [which] that specializes in substandard risks.

[(B)] (ii) The charging of a higher rate on the basis of information [which] that differs from that which the applicant or policyholder furnished.

(iii) An increase in any charge imposed by the insurer for any personal insurance in connection with the underwriting of insurance. For purposes of this sub-subparagraph, the imposition of a service fee is not a charge.

[(2)] (b) “Adverse underwriting decision” does not [include] mean any of the following actions, but the insurer or agent responsible for the occurrence of the action [shall] must nevertheless provide the applicant or policyholder with the specific reason or reasons for the occurrence:

[(a)] (A) The termination of an individual policy form on a class or statewide basis.

[(b)] (B) A declination of insurance coverage solely because the coverage is not available on a class or statewide basis.

[(c)] (C) The rescission of a policy.

[(3)] (2) “Affiliate of” a specified person or “person affiliated with” a specified person means a person who directly, or indirectly, through one or more intermediaries, controls, or is controlled by, or is under common control with, the person specified.

[(4)] (3) “Agent” means a person licensed by the Director of the Department of Consumer and Business Services as a resident or nonresident insurance agent.

[(5)] (4) “Applicant” means a person who seeks to contract for insurance coverage, other than a person seeking group insurance coverage [which] that is not individually underwritten.

(5) “Consumer” means an individual, or the individual’s representative, who seeks to obtain, obtains or has obtained one or more insurance products or services from a licensee that are to be used primarily for personal, family or household purposes, and about whom the licensee has personal information.

(6) “Consumer report” means any written, oral or other communication of information bearing on a natural person’s creditworthiness, credit standing, credit capacity, character, general reputation, personal characteristics or mode of living [which] that is used or expected to be used in connection with an insurance transaction.

(7) “Consumer reporting agency” means a person [who] that, for monetary fees or dues, or on a cooperative or nonprofit basis:

(a) Regularly engages, in whole or in part, in assembling or preparing consumer reports [for a monetary fee];

(b) Obtains information primarily from sources other than insurers; and

(8) “Control” means, and the terms “controlled by” or “under common control with” refer to, the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a person, whether through the ownership of voting securities, by contract other than a commercial contract for goods or nonmanagement services, or otherwise, unless the power of the person is the result of a corporate office held in, or an official position held with, the controlled person.

(9) “Credit history” means any written or other communication of any information by a consumer reporting agency that:

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

(b) Is used or expected to be used, or collected in whole or in part, as a factor in determining eligibility, premiums or rates for personal insurance.

(10) “Customer” means a consumer who has a continuing relationship with a licensee under which the licensee provides one or more insurance products or services to the consumer that are to be used primarily for personal, family or household purposes.

[(9)] (11) “Declination of insurance coverage” or “decline coverage” means a denial, in whole or in part, by an insurer or agent of an application for requested insurance coverage.

[(10)] (12) “Individual” means[:]

[(a) Means, for purposes of ORS 746.600 to 746.690 and 750.055, except as provided in paragraph (b) of this subsection,] a natural person who:

[(A)] (a) In the case of life or health insurance, is a past, present or proposed principal insured or certificate holder;

[(B)] (b) In the case of other kinds of insurance, is a past, present or proposed named insured or certificate holder;

[(C)] (c) Is a past, present or proposed policyowner;

[(D)] (d) Is a past or present applicant;

[(E)] (e) Is a past or present claimant; or

[(F)] (f) Derived, derives or is proposed to derive insurance coverage under an insurance policy or certificate [which] that is subject to ORS 746.600 to 746.690 [and 750.055].

[(b) Comprises, for purposes of ORS 746.620, 746.630 and 746.665, and for purposes of terms defined in this section as those terms are used in ORS 746.620, 746.630 and 746.665, the following categories of natural persons:]

[(A) “Consumer,” which means an individual, or the individual’s representative, who seeks to obtain, obtains or has obtained an insurance product or service from a licensee that is to be used primarily for personal, family or household purposes, and about whom the licensee has personal information.]

[(B) “Customer,” which means a consumer who has a continuing relationship with a licensee under which the licensee provides one or more insurance products or services to the consumer that are to be used primarily for personal, family or household purposes.]

[(11)] (13) “Institutional source” means a person or governmental entity [which] that provides information about an individual to an insurer, agent or insurance-support organization, other than:

(a) An agent;

(b) The individual who is the subject of the information; or

(14) “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 history.

[(12)] (15)(a) “Insurance-support organization” means[, except as provided in subsection (13) of this section,] a person who regularly engages, in whole or in part, in assembling or collecting information about natural persons for the primary purpose of providing the information to an insurer or agent for insurance transactions, including:

[(a)] (A) The furnishing of consumer reports to an insurer or agent for use in connection with insurance transactions; and

[(b)] (B) The collection of personal information from insurers, agents or other insurance-support organizations for the purpose of detecting or preventing fraud, material misrepresentation or material nondisclosure in connection with insurance underwriting or insurance claim activity.

[(13)] (b) “Insurance-support organization” does not include insurers, agents, governmental institutions, medical care institutions or medical professionals.

[(14)] (16) “Insurance transaction” means any transaction [involving] that involves insurance primarily for personal, family or household needs rather than business or professional needs and [which] that entails:

(a) The determination of an individual’s eligibility for an insurance coverage, benefit or payment; or

(b) The servicing of an insurance application, policy or certificate.

[(15)] (17) [“Insurer,” as defined in ORS 731.106, includes every person engaged in the business of entering into policies of insurance] “Insurer” has the meaning given that term in ORS 731.106.

[(16)] (18) “Investigative consumer report” means a consumer report, or portion of a consumer report, for which information about a natural person’s character, general reputation, personal characteristics or mode of living is obtained through personal interviews with the person’s neighbors, friends, associates, acquaintances or others who may have knowledge concerning such items of information.

[(17)] (19) “Licensee” means an insurer, agent or other person authorized or required to be authorized, or licensed or required to be licensed, pursuant to the Insurance Code.

[(18)] (20) “Medical care institution” means a facility or institution [which] that is licensed to provide health care services to natural persons, and includes but is not limited to health maintenance organizations, home health agencies, hospitals, medical clinics, public health agencies, rehabilitation agencies and skilled nursing facilities.

[(19)] (21) “Medical professional” means a person licensed or certified to provide health care services to natural persons, and includes but is not limited to chiropractors, clinical dieticians, clinical psychologists, dentists, naturopaths, nurses, occupational therapists, optometrists, pharmacists, physical therapists, physicians, podiatrists, psychiatric social workers and speech therapists.

[(20)] (22) “Medical record information” means personal information except age or gender, whether oral or recorded in any form or medium, created by or derived from a health care provider or the consumer that relates to:

(a) The past, present or future physical, mental or behavioral health or condition of an individual;

(b) The provision of health care to an individual; or

[(21)] (23) “Nonaffiliated third party” means any person except:

(a) An affiliate of a licensee;

(b) A person that is employed jointly by a licensee and by a person that is not an affiliate of the licensee; and

[(22)] (24) “Personal information” means information [which] that is identifiable with an individual, [which] that is gathered in connection with an insurance transaction and from which information judgments can be made about the individual’s character, habits, avocations, finances, occupations, general reputation, credit, health or any other personal characteristics. “Personal information” includes an individual’s name and address, an individual’s policy number or similar form of access code for the individual’s policy and “medical record information” but does not include “privileged information” except for privileged information [which] that has been disclosed in violation of ORS 746.665. “Personal information” does not include information that a licensee has a reasonable basis to believe is lawfully made available to the general public from federal, state or local government records, widely distributed media or disclosures to the public that are required by federal, state or local law.

(25) “Personal insurance” means the following types of insurance products or services that are to be used primarily for personal, family or household purposes:

(a) Private passenger automobile coverage;

(b) Homeowners, mobile homeowners, manufactured homeowners, condominium owners and renters coverage;

(c) Personal dwelling property coverage;

(d) Personal liability and theft coverage, including excess personal liability and theft coverage; and

(e) Personal inland marine coverage.

[(23)] (26) “Policyholder” means a person who:

(a) In the case of individual policies of life or health insurance, is a current policyowner;

(b) In the case of individual policies of other kinds of insurance, is currently a named insured; or

(c) In the case of group policies of insurance under which coverage is individually underwritten, is a current certificate holder.

[(24)] (27) “Pretext interview” means an interview wherein the interviewer, in an attempt to obtain information about a natural person, does one or more of the following:

(a) Pretends to be someone the interviewer is not.

(b) Pretends to represent a person the interviewer is not in fact representing.

(d) Refuses upon request to identify the interviewer.

[(25)] (28) “Privileged information” means information [which] that is identifiable with an individual and [which] that:

(a) Relates to a claim for insurance benefits or a civil or criminal proceeding involving the individual; and

(b) Is collected in connection with or in reasonable anticipation of a claim for insurance benefits or a civil or criminal proceeding involving the individual.

[(26)] (29) “Residual market mechanism” means an association, organization or other entity involved in the insuring of risks under ORS 735.005 to 735.145, 737.312 or other provisions of the Insurance Code relating to insurance applicants who are unable to procure insurance through normal insurance markets.

[(27)] (30) “Termination of insurance coverage” or “termination of an insurance policy” means either a cancellation or a nonrenewal of an insurance policy, in whole or in part, for any reason other than the failure of a premium to be paid as required by the policy.

SECTION 1a. If House Bill 2306 becomes law, section 1 of this 2003 Act (amending ORS 746.600) is repealed and ORS 746.600, as amended by section 6, chapter 87, Oregon Laws 2003 (Enrolled House Bill 2306), is amended to read:

746.600. As used in ORS 746.600 to 746.690:

(1)(a) “Adverse underwriting decision” means any of the following actions with respect to insurance transactions involving insurance coverage that is individually underwritten:

(A) A declination of insurance coverage.

(B) A termination of insurance coverage.

(C) Failure of an agent to apply for insurance coverage with a specific insurer that the agent represents and that is requested by an applicant.

(D) In the case of life or health insurance coverage, an offer to insure at higher than standard rates.

(E) In the case of other kinds of insurance coverage:

(i) Placement by an insurer or agent of a risk with a residual market mechanism, an unauthorized insurer or an insurer [which] that specializes in substandard risks.

(ii) The charging of a higher rate on the basis of information [which] that differs from that which the applicant or policyholder furnished.

(b) “Adverse underwriting decision” does not mean any of the following actions, but the insurer or agent responsible for the occurrence of the action must nevertheless provide the applicant or policyholder with the specific reason or reasons for the occurrence:

(A) The termination of an individual policy form on a class or statewide basis.

(B) A declination of insurance coverage solely because the coverage is not available on a class or statewide basis.

(2) “Affiliate of” a specified person or “person affiliated with” a specified person means a person who directly, or indirectly, through one or more intermediaries, controls, or is controlled by, or is under common control with, the person specified.

(3) “Agent” means a person licensed by the Director of the Department of Consumer and Business Services as a resident or nonresident insurance agent.

(4) “Applicant” means a person who seeks to contract for insurance coverage, other than a person seeking group insurance coverage that is not individually underwritten.

(5) “Consumer” means an individual, or the personal representative of the individual, who seeks to obtain, obtains or has obtained [an insurance product or service] one or more insurance products or services from a licensee that [is] are to be used primarily for personal, family or household purposes, and about whom the licensee has personal information.

(6) “Consumer report” means any written, oral or other communication of information bearing on a natural person’s creditworthiness, credit standing, credit capacity, character, general reputation, personal characteristics or mode of living that is used or expected to be used in connection with an insurance transaction.

(7) “Consumer reporting agency” means a person that, for monetary fees or dues, or on a cooperative or nonprofit basis:

(a) Regularly engages, in whole or in part, in assembling or preparing consumer reports [for a monetary fee];

(b) Obtains information primarily from sources other than insurers; and

(9) “Covered entity” means:

(a) A health insurer;

(b) A health care provider that transmits any health information in electronic form to carry out financial or administrative activities in connection with a transaction covered by section 3, chapter 87, Oregon Laws 2003 (Enrolled House Bill 2306), [of this 2003 Act] or by rules adopted under section 4, chapter 87, Oregon Laws 2003 (Enrolled House Bill 2306) [of this 2003 Act]; or

(10) “Credit history” means any written or other communication of any information by a consumer reporting agency that:

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

(b) Is used or expected to be used, or collected in whole or in part, as a factor in determining eligibility, premiums or rates for personal insurance.

[(10)] (11) “Customer” means a consumer [that] who has a continuing relationship with a licensee under which the licensee provides one or more insurance products or services to the consumer that are to be used primarily for personal, family or household purposes.

[(11)] (12) “Declination of insurance coverage” or “decline coverage” means a denial, in whole or in part, by an insurer or agent of an application for requested insurance coverage.

[(12)] (13) “Health care” means care, services or supplies related to the health of an individual.

[(13)] (14) “Health care operations” includes but is not limited to:

(a) Quality assessment, accreditation, auditing and improvement activities;

(b) Case management and care coordination;

(d) Underwriting activities;

(e) Arranging for legal services;

(f) Business planning;

(g) Customer services;

(h) Resolving internal grievances;

(i) Creating de-identified information; and

(j) Fundraising.

[(14)] (15) “Health care provider” includes but is not limited to:

(a) A psychologist, occupational therapist, clinical social worker, professional counselor or marriage and family therapist licensed under ORS chapter 675 or an employee of the psychologist, occupational therapist, clinical social worker, professional counselor or marriage and family therapist;

(b) A physician, podiatric physician and surgeon, physician assistant or acupuncturist licensed under ORS chapter 677 or an employee of the physician, podiatric physician and surgeon, physician assistant or acupuncturist;

(c) A nurse or nursing home administrator licensed under ORS chapter 678 or an employee of the nurse or nursing home administrator;

(d) A dentist licensed under ORS chapter 679 or an employee of the dentist;

(e) A dental hygienist or denturist licensed under ORS chapter 680 or an employee of the dental hygienist or denturist;

(f) A speech-language pathologist or audiologist licensed under ORS chapter 681 or an employee of the speech-language pathologist or audiologist;

(g) An emergency medical technician certified under ORS chapter 682;

(h) An optometrist licensed under ORS chapter 683 or an employee of the optometrist;

(i) A chiropractic physician licensed under ORS chapter 684 or an employee of the chiropractic physician;

(j) A naturopathic physician licensed under ORS chapter 685 or an employee of the naturopathic physician;

(k) A massage therapist licensed under ORS 687.011 to 687.250 or an employee of the massage therapist;

(L) A direct entry midwife licensed under ORS 687.405 to 687.495 or an employee of the direct entry midwife;

(m) A physical therapist licensed under ORS 688.010 to 688.220 or an employee of the physical therapist;

(n) A radiologic technologist licensed under ORS 688.405 to 688.605 or an employee of the radiologic technologist;

(o) A respiratory care practitioner licensed under ORS 688.800 to 688.840 or an employee of the respiratory care practitioner;

(p) A pharmacist licensed under ORS chapter 689 or an employee of the pharmacist;

(q) A dietitian licensed under ORS 691.405 to 691.585 or an employee of the dietitian;

(r) A funeral service practitioner licensed under ORS chapter 692 or an employee of the funeral service practitioner;

(s) A health care facility as defined in ORS 442.015;

(t) A home health agency as defined in ORS 443.005;

(u) A hospice program as defined in ORS 443.850;

(v) A clinical laboratory as defined in ORS 438.010;

(w) A pharmacy as defined in ORS 689.005;

(x) A diabetes self-management program as defined in ORS 743.694; and

(y) Any other person or entity that furnishes, bills for or is paid for health care in the normal course of business.

[(15)] (16) “Health information” means any oral or written information in any form or medium that:

(a) Is created or received by a covered entity, a public health authority, a life insurer, a school, a university or a health care provider that is not a covered entity; and

(b) Relates to:

(A) The past, present or future physical or mental health or condition of an individual;

(B) The provision of health care to an individual; or

[(16)] (17) “Health insurer” means:

(a) An insurer who offers:

(A) A health benefit plan as defined in ORS 743.730;

(B) A short term health insurance policy, the duration of which does not exceed six months including renewals;

(D) A medicare supplemental policy; or

(E) A dental only policy.

(b) The Oregon Medical Insurance Pool operated by the Oregon Medical Insurance Pool Board under ORS 735.600 to 735.650.

[(17)] (18) “Individual” means a natural person who:

(a) In the case of life or health insurance, is a past, present or proposed principal insured or certificate holder;

(b) In the case of other kinds of insurance, is a past, present or proposed named insured or certificate holder;

(d) Is a past or present applicant;

(e) Is a past or present claimant; or

(f) Derived, derives or is proposed to derive insurance coverage under an insurance policy or certificate that is subject to ORS 746.600 to 746.690.

[(18)] (19) “Individually identifiable health information” means any oral or written health information that is:

(a) Created or received by a covered entity or a health care provider that is not a covered entity; and

(b) Identifiable to an individual, including demographic information that identifies the individual, or for which there is a reasonable basis to believe the information can be used to identify an individual, and that relates to:

(A) The past, present or future physical or mental health or condition of an individual;

(B) The provision of health care to an individual; or

[(19)] (20) “Institutional source” means a person or governmental entity that provides information about an individual to an insurer, agent or insurance-support organization, other than:

(a) An agent;

(b) The individual who is the subject of the information; or

(21) “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 history.

[(20)(a)] (22)(a) “Insurance-support organization” means a person who regularly engages, in whole or in part, in assembling or collecting information about natural persons for the primary purpose of providing the information to an insurer or agent for insurance transactions, including:

(A) The furnishing of consumer reports to an insurer or agent for use in connection with insurance transactions; and

(B) The collection of personal information from insurers, agents or other insurance-support organizations for the purpose of detecting or preventing fraud, material misrepresentation or material nondisclosure in connection with insurance underwriting or insurance claim activity.

(b) “Insurance-support organization” does not mean insurers, agents, governmental institutions or health care providers.

[(21)] (23) “Insurance transaction” means any transaction [involving] that involves insurance primarily for personal, family or household needs rather than business or professional needs and that entails:

(a) The determination of an individual’s eligibility for an insurance coverage, benefit or payment; or

(b) The servicing of an insurance application, policy or certificate.

[(22)] (24) “Insurer[,]” has the meaning given that term in ORS 731.106.

[(23)] (25) “Investigative consumer report” means a consumer report, or portion of a consumer report, for which information about a natural person’s character, general reputation, personal characteristics or mode of living is obtained through personal interviews with the person’s neighbors, friends, associates, acquaintances or others who may have knowledge concerning such items of information.

[(24)] (26) “Licensee” means an insurer, agent or other person authorized or required to be authorized, or licensed or required to be licensed, pursuant to the Insurance Code.

[(25)] (27) “Nonaffiliated third party” means any person except:

(a) An affiliate of a licensee;

(b) A person that is employed jointly by a licensee and by a person that is not an affiliate of the licensee; and

[(26)] (28) “Payment” includes but is not limited to:

(a) Efforts to obtain premiums or reimbursement;

(b) Determining eligibility or coverage;

(d) Claims management;

(e) Reviewing health care to determine medical necessity;

(f) Utilization review; and

(g) Disclosures to consumer reporting agencies.

[(27)(a)] (29)(a) “Personal financial information” means:

(A) Information that is identifiable with an individual, gathered in connection with an insurance transaction from which judgments can be made about the individual’s character, habits, avocations, finances, occupations, general reputation, credit or any other personal characteristics; or

(B) An individual’s name, address and policy number or similar form of access code for the individual’s policy.

(b) “Personal financial information” does not mean information that a licensee has a reasonable basis to believe is lawfully made available to the general public from federal, state or local government records, widely distributed media or disclosures to the public that are required by federal, state or local law.

[(28)] (30) “Personal information” means:

(a) Personal financial information;

(b) Individually identifiable health information; or

(31) “Personal insurance” means the following types of insurance products or services that are to be used primarily for personal, family or household purposes:

(a) Private passenger automobile coverage;

(b) Homeowners, mobile homeowners, manufactured homeowners, condominium owners and renters coverage;

(c) Personal dwelling property coverage;

(d) Personal liability and theft coverage, including excess personal liability and theft coverage; and

(e) Personal inland marine coverage.

[(29)] (32) “Personal representative” includes but is not limited to:

(a) A person appointed as a guardian under ORS 125.305, 419B.370, 419C.481 or 419C.555 with authority to make medical and health care decisions;

(b) A person appointed as a health care representative under ORS 127.505 to 127.660 or 127.700 to 127.737 to make health care decisions or mental health treatment decisions; and

[(30)] (33) “Policyholder” means a person who:

(a) In the case of individual policies of life or health insurance, is a current policyowner;

(b) In the case of individual policies of other kinds of insurance, is currently a named insured; or

(c) In the case of group policies of insurance under which coverage is individually underwritten, is a current certificate holder.

[(31)] (34) “Pretext interview” means an interview wherein the interviewer, in an attempt to obtain personal information about a natural person, does one or more of the following:

(a) Pretends to be someone the interviewer is not.

(b) Pretends to represent a person the interviewer is not in fact representing.

(d) Refuses upon request to identify the interviewer.

[(32)] (35) “Privileged information” means information that is identifiable with an individual and that:

(a) Relates to a claim for insurance benefits or a civil or criminal proceeding involving the individual; and

(b) Is collected in connection with or in reasonable anticipation of a claim for insurance benefits or a civil or criminal proceeding involving the individual.

[(33)(a)] (36)(a) “Protected health information” means individually identifiable health information that is transmitted or maintained in any form of electronic or other medium by a covered entity.

(b) “Protected health information” does not mean individually identifiable health information in:

(A) Education records covered by the federal Family Educational Rights and Privacy Act (20 U.S.C. 1232g);

(B) Records described at 20 U.S.C. 1232g(a)(4)(B)(iv); or

[(34)] (37) “Residual market mechanism” means an association, organization or other entity involved in the insuring of risks under ORS 735.005 to 735.145, 737.312 or other provisions of the Insurance Code relating to insurance applicants who are unable to procure insurance through normal insurance markets.

[(35)] (38) “Termination of insurance coverage” or “termination of an insurance policy” means either a cancellation or a nonrenewal of an insurance policy, in whole or in part, for any reason other than the failure of a premium to be paid as required by the policy.

[(36)] (39) “Treatment” includes but is not limited to:

(a) The provision, coordination or management of health care; and

(b) Consultations and referrals between health care providers.

SECTION 2. ORS 746.650 is amended to read:

746.650. (1) In the event of an adverse underwriting decision, the insurer or agent responsible for the decision [shall] must:

(a) Either provide the applicant, policyholder or individual proposed for coverage with the specific reason or reasons for the adverse underwriting decision in writing or advise the person that upon written request the person may receive the specific reason or reasons in writing; and

(b) Provide the applicant, policyholder or individual proposed for coverage with a summary of the rights established under subsection (2) of this section and ORS 746.640 and 746.645.

(2) Upon receipt of a written request within 90 business days from the date of the mailing of notice or other communication of an adverse underwriting decision to an applicant, policyholder or individual proposed for coverage, the insurer or agent shall furnish to the person within 21 business days from the date of receipt of the written request:

(a) The specific reason or reasons for the adverse underwriting decision, in writing, if this information was not initially furnished in writing pursuant to subsection (1) of this section;

(b) The specific items of personal information and privileged information that support these reasons, subject, however, to the following:

(A) The insurer or agent [shall] is not [be] required to furnish specific items of privileged information if it has a reasonable suspicion, based upon specific information available for review by the Director of the Department of Consumer and Business Services, that the applicant, policyholder or individual proposed for coverage has engaged in criminal activity, fraud, material misrepresentation or material nondisclosure[.]; and

(B) Specific items of medical record information supplied by a medical care institution or medical professional shall be disclosed either directly to the individual about whom the information relates or to a medical professional designated by the individual and licensed to provide medical care with respect to the condition to which the information relates, whichever the insurer or agent prefers; and

(c) The names and addresses of the institutional sources [which] that supplied the specific items of information described in paragraph (b) of this subsection. However, the identity of any medical care institution or medical professional shall be disclosed either directly to the individual or to the designated medical professional, whichever the insurer or agent prefers.

(3) The obligations imposed by this section upon an insurer or agent may be satisfied by another insurer or agent authorized to act on its behalf.

(4) When an adverse underwriting decision results solely from an oral request or inquiry, the explanation of reasons and summary of rights required by subsection (1) of this section may be given orally.

(5) Notwithstanding subsection (1) of this section, when an adverse underwriting decision is based in whole or in part on credit history or insurance score, the insurer or agent responsible for the decision must provide the applicant, policyholder or individual proposed for coverage with the specific reason or reasons for the adverse underwriting decision in writing. The notice must include the following:

(a) A summary of no more than four of the most significant credit reasons for the adverse underwriting decision, listed in decreasing order of importance, that clearly identifies the specific credit history or insurance score used to make the adverse underwriting decision. An insurer or agent may not use “poor credit history” or a similar phrase as a reason for an adverse underwriting decision.

(b) The name, address and telephone number, including a toll-free telephone number, of the consumer reporting agency that provided the information for the consumer report.

(c) A statement that the consumer reporting agency used by the insurer or agent to obtain the credit history of the consumer did not make the adverse underwriting decision and is unable to provide the consumer with specific reasons why the insurer or agent made an adverse underwriting decision.

(d) Information on the right of the consumer:

(A) To obtain a free copy of the consumer’s consumer report from the consumer reporting agency described in paragraph (b) of this subsection, including the deadline, if any, for obtaining a copy; and

(B) To dispute the accuracy or completeness of any information in a consumer report furnished by the consumer reporting agency.

(6) Notwithstanding subsection (1) of this section, an insurer or agent responsible for an adverse underwriting decision that is based in whole or in part on credit history or insurance score must provide the notice described in subsection (5) of this section only when the insurer or agent makes the initial adverse underwriting decision regarding a consumer.

SECTION 2a. If Senate Bill 253 becomes law, section 2 of this 2003 Act (amending ORS 746.650) is repealed and ORS 746.650, as amended by section 161, chapter 364, Oregon Laws 2003 (Enrolled Senate Bill 253), is amended to read:

746.650. (1) In the event of an adverse underwriting decision, the insurer or insurance producer responsible for the decision [shall] must:

(b) Provide the applicant, policyholder or individual proposed for coverage with a summary of the rights established under subsection (2) of this section and ORS 746.640 and 746.645.

(2) Upon receipt of a written request within 90 business days from the date of the mailing of notice or other communication of an adverse underwriting decision to an applicant, policyholder or individual proposed for coverage, the insurer or insurance producer shall furnish to the person within 21 business days from the date of receipt of the written request:

(a) The specific reason or reasons for the adverse underwriting decision, in writing, if this information was not initially furnished in writing pursuant to subsection (1) of this section;

(b) The specific items of personal information and privileged information that support these reasons, subject, however, to the following:

(A) The insurer or insurance producer [shall] is not [be] required to furnish specific items of privileged information if it has a reasonable suspicion, based upon specific information available for review by the Director of the Department of Consumer and Business Services, that the applicant, policyholder or individual proposed for coverage has engaged in criminal activity, fraud, material misrepresentation or material nondisclosure[.]; and

(3) The obligations imposed by this section upon an insurer or insurance producer may be satisfied by another insurer or [agent] insurance producer authorized to act on its behalf.

(5) Notwithstanding subsection (1) of this section, when an adverse underwriting decision is based in whole or in part on credit history or insurance score, the insurer or insurance producer responsible for the decision must provide the applicant, policyholder or individual proposed for coverage with the specific reason or reasons for the adverse underwriting decision in writing. The notice must include the following:

(a) A summary of no more than four of the most significant credit reasons for the adverse underwriting decision, listed in decreasing order of importance, that clearly identifies the specific credit history or insurance score used to make the adverse underwriting decision. An insurer or insurance producer may not use “poor credit history” or a similar phrase as a reason for an adverse underwriting decision.

(b) The name, address and telephone number, including a toll-free telephone number, of the consumer reporting agency that provided the information for the consumer report.

(c) A statement that the consumer reporting agency used by the insurer or insurance producer to obtain the credit history of the consumer did not make the adverse underwriting decision and is unable to provide the consumer with specific reasons why the insurer or insurance producer made an adverse underwriting decision.

(d) Information on the right of the consumer:

(B) To dispute the accuracy or completeness of any information in a consumer report furnished by the consumer reporting agency.

(6) Notwithstanding subsection (1) of this section, an insurer or insurance producer responsible for an adverse underwriting decision that is based in whole or in part on credit history or insurance score must provide the notice described in subsection (5) of this section only when the insurer or insurance producer makes the initial adverse underwriting decision regarding a consumer.

SECTION 3. Sections 4, 5 and 7 of this 2003 Act are added to and made a part of ORS 746.600 to 746.690.

SECTION 4. (1) An insurer that issues personal insurance policies in this state:

(a) May not cancel or nonrenew personal insurance that has been in effect for more than 60 days based in whole or in part on a consumer’s credit history or insurance score.

(b) May use a consumer’s credit history to decline coverage of personal insurance in the initial underwriting decision only in combination with other substantive underwriting factors. An offer of placement with an affiliate insurer does not constitute a declination of insurance coverage.

(c) May not use the following types of credit history to decline coverage of personal insurance, calculate an insurance score or determine personal insurance premiums or rates:

(A) The absence of credit history or the inability to determine the consumer’s credit history, if the insurer has received accurate and complete information from the consumer, unless the insurer does one of the following:

(i) If the insurer presents information that the absence of credit history or the inability to determine the consumer’s credit history relates to the risk for the insurer, uses the absence of a credit history or inability to determine a consumer’s credit history as allowed by rules adopted by the Director of the Department of Consumer and Business Services;

(ii) Treats the consumer as if the applicant or insured has neutral credit history, as defined by the insurer; or

(iii) Excludes the use of credit information as a factor and uses only other underwriting criteria.

(B) Credit inquiries not initiated by the consumer or inquiries requested by the consumer for the consumer’s own credit information.

(C) Inquiries identified on a consumer’s credit report relating to insurance coverage.

(D) Multiple lender inquiries identified as being from the home mortgage industry and made within 30 days of one another, unless only one inquiry is considered.

(E) Multiple lender inquiries identified as being from the automobile lending industry and made within 30 days of one another, unless only one inquiry is considered.

(F) The consumer’s total available line of credit. However, an insurer may consider the total amount of outstanding debt in relation to the total available line of credit.

(2) If an insurer assigns a consumer to a less favorable rating category for a policy of personal insurance based in whole or in part on the consumer’s credit history or insurance score, the consumer may request, no more than once annually, that the insurer rerate the consumer according to the standards that the insurer would apply to the consumer if the consumer were initially applying for the same personal insurance.

(3) If an insurer uses disputed credit history to determine eligibility for coverage of personal insurance and places a consumer with an affiliate that charges higher premiums or offers less favorable policy terms:

(a) The insurer shall rerate the policy retroactive to the effective date of the current policy term; and

(b) The policy, as reissued or rerated, shall provide the premiums and policy terms for which the consumer would have been eligible if accurate credit history had been used to determine eligibility.

(4) If an insurer charges higher premiums due to disputed credit history, the insurer shall rerate the policy retroactive to the effective date of the current policy term. As rerated, the insurer shall charge the consumer the same premiums the consumer would have been charged if accurate credit history had been used to calculate an insurance score.

(5) Subsections (3) and (4) of this section apply only if the consumer resolves the credit dispute under the process set forth in the federal Fair Credit Reporting Act (15 U.S.C. 1681) and notifies the insurer in writing that the dispute has been resolved.

(6) Except as provided in subsections (2), (3) and (4) of this section, an insurer may only use rating factors other than credit history or insurance score to rerate the policy at renewal.

SECTION 5. (1) An insurer may not use credit history to determine personal insurance eligibility, premiums or rates for coverage unless the insurer has filed the insurance scoring models used by the insurer with the Director of the Department of Consumer and Business Services. An insurance scoring model includes all attributes and factors used in the calculation of an insurance score.

(2) Insurance scoring models filed with the director under subsection (1) of this section are confidential and not subject to disclosure under ORS 192.410 to 192.505.

SECTION 6. Sections 4 and 5 of this 2003 Act and the amendments to ORS 746.600 and 746.650 by sections 1, 1a, 2 and 2a of this 2003 Act apply to applications for issuance of insurance policies made on or after the effective date of this 2003 Act.

SECTION 7. (1) An insurer that issues personal insurance policies in this state may not cancel or nonrenew a policy of personal insurance based in whole or in part on a consumer’s credit history or insurance score.

(2) If, prior to the effective date of this 2003 Act, an insurer has assigned a consumer to a less favorable rating category for a policy of personal insurance based in whole or in part on the consumer’s credit history or insurance score, the consumer may request, no more than once annually, that the insurer rerate the consumer according to the standards that the insurer would apply to the consumer if the consumer were initially applying for the same personal insurance on or after the effective date of this 2003 Act.

(3) An insurer that receives a request under subsection (2) of this section may not consider that the consumer was assigned to a less favorable rate category when the insurer rerates the consumer.

(4) If an insurer uses disputed credit history to determine eligibility for coverage of personal insurance and places a consumer with an affiliate that charges higher premiums or offers less favorable policy terms:

(a) The insurer shall rerate the policy retroactive to the effective date of the current policy term; and

(5) If an insurer charges higher premiums due to disputed credit history, the insurer shall rerate the policy retroactive to the effective date of the current policy term. As rerated, the insurer shall charge the consumer the same premiums the consumer would have been charged if accurate credit history had been used to calculate an insurance score.

(6) Subsections (4) and (5) of this section apply only if the consumer resolves the credit dispute under the process set forth in the federal Fair Credit Reporting Act (15 U.S.C. 1681) and notifies the insurer in writing that the dispute has been resolved.

(7) Except as provided in subsections (2), (4) and (5) of this section, an insurer may only use rating factors other than credit history or insurance score to rerate the policy at renewal.

SECTION 8. Section 7 of this 2003 Act applies to policies of personal insurance issued before the effective date of this 2003 Act.

Approved by the Governor September 22, 2003

Filed in the office of Secretary of State September 22, 2003

Effective date January 1, 2004

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