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S. B. No. 73 As IntroducedAs Introduced
130th General Assembly | Regular Session | 2013-2014 |
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Cosponsors:
Senators Smith, Brown
A BILL
To amend section 3901.21 of the Revised Code to
prohibit an insurer's use of a credit score,
credit history, or credit report in fixing a
premium rate for, or the terms and conditions of,
an insurance policy, or in determining whether to
issue, continue, or renew an insurance policy.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF OHIO:
Section 1. That section 3901.21 of the Revised Code be
amended to read as follows:
Sec. 3901.21. The following are hereby defined as unfair and
deceptive acts or practices in the business of insurance:
(A) Making, issuing, circulating, or causing or permitting to
be made, issued, or circulated, or preparing with intent to so
use, any estimate, illustration, circular, or statement
misrepresenting the terms of any policy issued or to be issued or
the benefits or advantages promised thereby or the dividends or
share of the surplus to be received thereon, or making any false
or misleading statements as to the dividends or share of surplus
previously paid on similar policies, or making any misleading
representation or any misrepresentation as to the financial
condition of any insurer as shown by the last preceding verified
statement made by it to the insurance department of this state, or
as to the legal reserve system upon which any life insurer
operates, or using any name or title of any policy or class of
policies misrepresenting the true nature thereof, or making any
misrepresentation or incomplete comparison to any person for the
purpose of inducing or tending to induce such person to purchase,
amend, lapse, forfeit, change, or surrender insurance.
Any written statement concerning the premiums for a policy
which refers to the net cost after credit for an assumed dividend,
without an accurate written statement of the gross premiums, cash
values, and dividends based on the insurer's current dividend
scale, which are used to compute the net cost for such policy, and
a prominent warning that the rate of dividend is not guaranteed,
is a misrepresentation for the purposes of this division.
(B) Making, publishing, disseminating, circulating, or
placing before the public or causing, directly or indirectly, to
be made, published, disseminated, circulated, or placed before the
public, in a newspaper, magazine, or other publication, or in the
form of a notice, circular, pamphlet, letter, or poster, or over
any radio station, or in any other way, or preparing with intent
to so use, an advertisement, announcement, or statement containing
any assertion, representation, or statement, with respect to the
business of insurance or with respect to any person in the conduct
of the person's insurance business, which is untrue, deceptive, or
misleading.
(C) Making, publishing, disseminating, or circulating,
directly or indirectly, or aiding, abetting, or encouraging the
making, publishing, disseminating, or circulating, or preparing
with intent to so use, any statement, pamphlet, circular, article,
or literature, which is false as to the financial condition of an
insurer and which is calculated to injure any person engaged in
the business of insurance.
(D) Filing with any supervisory or other public official, or
making, publishing, disseminating, circulating, or delivering to
any person, or placing before the public, or causing directly or
indirectly to be made, published, disseminated, circulated,
delivered to any person, or placed before the public, any false
statement of financial condition of an insurer.
Making any false entry in any book, report, or statement of
any insurer with intent to deceive any agent or examiner lawfully
appointed to examine into its condition or into any of its
affairs, or any public official to whom such insurer is required
by law to report, or who has authority by law to examine into its
condition or into any of its affairs, or, with like intent,
willfully omitting to make a true entry of any material fact
pertaining to the business of such insurer in any book, report, or
statement of such insurer, or mutilating, destroying, suppressing,
withholding, or concealing any of its records.
(E) Issuing or delivering or permitting agents, officers, or
employees to issue or deliver agency company stock or other
capital stock or benefit certificates or shares in any common-law
corporation or securities or any special or advisory board
contracts or other contracts of any kind promising returns and
profits as an inducement to insurance.
(F) Making or permitting any unfair discrimination among
individuals of the same class and equal expectation of life in the
rates charged for any contract of life insurance or of life
annuity or in the dividends or other benefits payable thereon, or
in any other of the terms and conditions of such contract.
(G)(1) Except as otherwise expressly provided by law,
knowingly permitting or offering to make or making any contract of
life insurance, life annuity or accident and health insurance, or
agreement as to such contract other than as plainly expressed in
the contract issued thereon, or paying or allowing, or giving or
offering to pay, allow, or give, directly or indirectly, as
inducement to such insurance, or annuity, any rebate of premiums
payable on the contract, or any special favor or advantage in the
dividends or other benefits thereon, or any valuable consideration
or inducement whatever not specified in the contract; or giving,
or selling, or purchasing, or offering to give, sell, or purchase,
as inducement to such insurance or annuity or in connection
therewith, any stocks, bonds, or other securities, or other
obligations of any insurance company or other corporation,
association, or partnership, or any dividends or profits accrued
thereon, or anything of value whatsoever not specified in the
contract.
(2) Nothing in division (F) or division (G)(1) of this
section shall be construed as prohibiting any of the following
practices: (a) in the case of any contract of life insurance or
life annuity, paying bonuses to policyholders or otherwise abating
their premiums in whole or in part out of surplus accumulated from
nonparticipating insurance, provided that any such bonuses or
abatement of premiums shall be fair and equitable to policyholders
and for the best interests of the company and its policyholders;
(b) in the case of life insurance policies issued on the
industrial debit plan, making allowance to policyholders who have
continuously for a specified period made premium payments directly
to an office of the insurer in an amount which fairly represents
the saving in collection expenses; (c) readjustment of the rate of
premium for a group insurance policy based on the loss or expense
experience thereunder, at the end of the first or any subsequent
policy year of insurance thereunder, which may be made retroactive
only for such policy year.
(H) Making, issuing, circulating, or causing or permitting to
be made, issued, or circulated, or preparing with intent to so
use, any statement to the effect that a policy of life insurance
is, is the equivalent of, or represents shares of capital stock or
any rights or options to subscribe for or otherwise acquire any
such shares in the life insurance company issuing that policy or
any other company.
(I) Making, issuing, circulating, or causing or permitting to
be made, issued or circulated, or preparing with intent to so
issue, any statement to the effect that payments to a policyholder
of the principal amounts of a pure endowment are other than
payments of a specific benefit for which specific premiums have
been paid.
(J) Making, issuing, circulating, or causing or permitting to
be made, issued, or circulated, or preparing with intent to so
use, any statement to the effect that any insurance company was
required to change a policy form or related material to comply
with Title XXXIX of the Revised Code or any regulation of the
superintendent of insurance, for the purpose of inducing or
intending to induce any policyholder or prospective policyholder
to purchase, amend, lapse, forfeit, change, or surrender
insurance.
(K) Aiding or abetting another to violate this section.
(L) Refusing to issue any policy of insurance, or canceling
or declining to renew such policy because of the sex or marital
status of the applicant, prospective insured, insured, or
policyholder.
(M)(1) Making or permitting any unfair discrimination between
individuals of the same class and of essentially the same hazard
in the amount of premium, policy fees, or rates charged for any
policy or contract of insurance, other than life insurance, or in
the benefits payable thereunder, or in underwriting standards and
practices or eligibility requirements, or in any of the terms or
conditions of such contract, or in any other manner whatever.
(2) Considering an individual's credit score, credit report,
or credit history in determining a premium, policy fee, or rate
charged for, in setting the coverage provided by, benefits payable
under, or other terms and conditions of, or in refusing to issue,
canceling, or refusing to renew, any policy or contract of
insurance.
For purposes of division (M)(2) of this section, "credit
score," "credit report," and "credit history" mean any written,
oral, or other communication of any information bearing on a
consumer's creditworthiness, credit standing, or credit capacity.
(N) Refusing to make available disability income insurance
solely because the applicant's principal occupation is that of
managing a household.
(O) Refusing, when offering maternity benefits under any
individual or group sickness and accident insurance policy, to
make maternity benefits available to the policyholder for the
individual or individuals to be covered under any comparable
policy to be issued for delivery in this state, including family
members if the policy otherwise provides coverage for family
members. Nothing in this division shall be construed to prohibit
an insurer from imposing a reasonable waiting period for such
benefits under an individual sickness and accident insurance
policy issued to an individual who is not a federally eligible
individual or a nonemployer-related group sickness and accident
insurance policy, but in no event shall such waiting period exceed
two hundred seventy days.
For purposes of division (O) of this section, "federally
eligible individual" means an eligible individual as defined in 45
C.F.R. 148.103.
(P) Using, or permitting to be used, a pattern settlement as
the basis of any offer of settlement. As used in this division,
"pattern settlement" means a method by which liability is
routinely imputed to a claimant without an investigation of the
particular occurrence upon which the claim is based and by using a
predetermined formula for the assignment of liability arising out
of occurrences of a similar nature. Nothing in this division shall
be construed to prohibit an insurer from determining a claimant's
liability by applying formulas or guidelines to the facts and
circumstances disclosed by the insurer's investigation of the
particular occurrence upon which a claim is based.
(Q) Refusing to insure, or refusing to continue to insure, or
limiting the amount, extent, or kind of life or sickness and
accident insurance or annuity coverage available to an individual,
or charging an individual a different rate for the same coverage
solely because of blindness or partial blindness. With respect to
all other conditions, including the underlying cause of blindness
or partial blindness, persons who are blind or partially blind
shall be subject to the same standards of sound actuarial
principles or actual or reasonably anticipated actuarial
experience as are sighted persons. Refusal to insure includes, but
is not limited to, denial by an insurer of disability insurance
coverage on the grounds that the policy defines "disability" as
being presumed in the event that the eyesight of the insured is
lost. However, an insurer may exclude from coverage disabilities
consisting solely of blindness or partial blindness when such
conditions existed at the time the policy was issued. To the
extent that the provisions of this division may appear to conflict
with any provision of section 3999.16 of the Revised Code, this
division applies.
(R)(1) Directly or indirectly offering to sell, selling, or
delivering, issuing for delivery, renewing, or using or otherwise
marketing any policy of insurance or insurance product in
connection with or in any way related to the grant of a student
loan guaranteed in whole or in part by an agency or commission of
this state or the United States, except insurance that is required
under federal or state law as a condition for obtaining such a
loan and the premium for which is included in the fees and charges
applicable to the loan; or, in the case of an insurer or insurance
agent, knowingly permitting any lender making such loans to engage
in such acts or practices in connection with the insurer's or
agent's insurance business.
(2) Except in the case of a violation of division (G) of this
section, division (R)(1) of this section does not apply to either
of the following:
(a) Acts or practices of an insurer, its agents,
representatives, or employees in connection with the grant of a
guaranteed student loan to its insured or the insured's spouse or
dependent children where such acts or practices take place more
than ninety days after the effective date of the insurance;
(b) Acts or practices of an insurer, its agents,
representatives, or employees in connection with the solicitation,
processing, or issuance of an insurance policy or product covering
the student loan borrower or the borrower's spouse or dependent
children, where such acts or practices take place more than one
hundred eighty days after the date on which the borrower is
notified that the student loan was approved.
(S) Denying coverage, under any health insurance or health
care policy, contract, or plan providing family coverage, to any
natural or adopted child of the named insured or subscriber solely
on the basis that the child does not reside in the household of
the named insured or subscriber.
(T)(1) Using any underwriting standard or engaging in any
other act or practice that, directly or indirectly, due solely to
any health status-related factor in relation to one or more
individuals, does either of the following:
(a) Terminates or fails to renew an existing individual
policy, contract, or plan of health benefits, or a health benefit
plan issued to an employer, for which an individual would
otherwise be eligible;
(b) With respect to a health benefit plan issued to an
employer, excludes or causes the exclusion of an individual from
coverage under an existing employer-provided policy, contract, or
plan of health benefits.
(2) The superintendent of insurance may adopt rules in
accordance with Chapter 119. of the Revised Code for purposes of
implementing division (T)(1) of this section.
(3) For purposes of division (T)(1) of this section, "health
status-related factor" means any of the following:
(b) Medical condition, including both physical and mental
illnesses;
(d) Receipt of health care;
(g) Evidence of insurability, including conditions arising
out of acts of domestic violence;
(U) With respect to a health benefit plan issued to a small
employer, as those terms are defined in section 3924.01 of the
Revised Code, negligently or willfully placing coverage for
adverse risks with a certain carrier, as defined in section
3924.01 of the Revised Code.
(V) Using any program, scheme, device, or other unfair act or
practice that, directly or indirectly, causes or results in the
placing of coverage for adverse risks with another carrier, as
defined in section 3924.01 of the Revised Code.
(W) Failing to comply with section 3923.23, 3923.231,
3923.232, 3923.233, or 3923.234 of the Revised Code by engaging in
any unfair, discriminatory reimbursement practice.
(X) Intentionally establishing an unfair premium for, or
misrepresenting the cost of, any insurance policy financed under a
premium finance agreement of an insurance premium finance company.
(Y)(1)(a) Limiting coverage under, refusing to issue,
canceling, or refusing to renew, any individual policy or contract
of life insurance, or limiting coverage under or refusing to issue
any individual policy or contract of health insurance, for the
reason that the insured or applicant for insurance is or has been
a victim of domestic violence;
(b) Adding a surcharge or rating factor to a premium of any
individual policy or contract of life or health insurance for the
reason that the insured or applicant for insurance is or has been
a victim of domestic violence;
(c) Denying coverage under, or limiting coverage under, any
policy or contract of life or health insurance, for the reason
that a claim under the policy or contract arises from an incident
of domestic violence;
(d) Inquiring, directly or indirectly, of an insured under,
or of an applicant for, a policy or contract of life or health
insurance, as to whether the insured or applicant is or has been a
victim of domestic violence, or inquiring as to whether the
insured or applicant has sought shelter or protection from
domestic violence or has sought medical or psychological treatment
as a victim of domestic violence.
(2) Nothing in division (Y)(1) of this section shall be
construed to prohibit an insurer from inquiring as to, or from
underwriting or rating a risk on the basis of, a person's physical
or mental condition, even if the condition has been caused by
domestic violence, provided that all of the following apply:
(a) The insurer routinely considers the condition in
underwriting or in rating risks, and does so in the same manner
for a victim of domestic violence as for an insured or applicant
who is not a victim of domestic violence;
(b) The insurer does not refuse to issue any policy or
contract of life or health insurance or cancel or refuse to renew
any policy or contract of life insurance, solely on the basis of
the condition, except where such refusal to issue, cancellation,
or refusal to renew is based on sound actuarial principles or is
related to actual or reasonably anticipated experience;
(c) The insurer does not consider a person's status as being
or as having been a victim of domestic violence, in itself, to be
a physical or mental condition;
(d) The underwriting or rating of a risk on the basis of the
condition is not used to evade the intent of division (Y)(1) of
this section, or of any other provision of the Revised Code.
(3)(a) Nothing in division (Y)(1) of this section shall be
construed to prohibit an insurer from refusing to issue a policy
or contract of life insurance insuring the life of a person who is
or has been a victim of domestic violence if the person who
committed the act of domestic violence is the applicant for the
insurance or would be the owner of the insurance policy or
contract.
(b) Nothing in division (Y)(2) of this section shall be
construed to permit an insurer to cancel or refuse to renew any
policy or contract of health insurance in violation of the "Health
Insurance Portability and Accountability Act of 1996," 110 Stat.
1955, 42 U.S.C.A. 300gg-41(b), as amended, or in a manner that
violates or is inconsistent with any provision of the Revised Code
that implements the "Health Insurance Portability and
Accountability Act of 1996."
(4) An insurer is immune from any civil or criminal liability
that otherwise might be incurred or imposed as a result of any
action taken by the insurer to comply with division (Y) of this
section.
(5) As used in division (Y) of this section, "domestic
violence" means any of the following acts:
(a) Knowingly causing or attempting to cause physical harm to
a family or household member;
(b) Recklessly causing serious physical harm to a family or
household member;
(c) Knowingly causing, by threat of force, a family or
household member to believe that the person will cause imminent
physical harm to the family or household member.
For the purpose of division (Y)(5) of this section, "family
or household member" has the same meaning as in section 2919.25 of
the Revised Code.
Nothing in division (Y)(5) of this section shall be construed
to require, as a condition to the application of division (Y) of
this section, that the act described in division (Y)(5) of this
section be the basis of a criminal prosecution.
(Z) Disclosing a coroner's records by an insurer in violation
of section 313.10 of the Revised Code.
(AA) Making, issuing, circulating, or causing or permitting
to be made, issued, or circulated any statement or representation
that a life insurance policy or annuity is a contract for the
purchase of funeral goods or services.
(BB) With respect to private passenger automobile insurance,
charging premium rates that are excessive, inadequate, or unfairly
discriminatory, pursuant to division (D) of section 3937.02 of the
Revised Code, based solely on the location of the residence of the
insured.
The enumeration in sections 3901.19 to 3901.26 of the Revised
Code of specific unfair or deceptive acts or practices in the
business of insurance is not exclusive or restrictive or intended
to limit the powers of the superintendent of insurance to adopt
rules to implement this section, or to take action under other
sections of the Revised Code.
This section does not prohibit the sale of shares of any
investment company registered under the "Investment Company Act of
1940," 54 Stat. 789, 15 U.S.C.A. 80a-1, as amended, or any
policies, annuities, or other contracts described in section
3907.15 of the Revised Code.
As used in this section, "estimate," "statement,"
"representation," "misrepresentation," "advertisement," or
"announcement" includes oral or written occurrences.
Section 2. That existing section 3901.21 of the Revised Code
is hereby repealed.
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