As Introduced

128th General Assembly Regular Session 2009-2010

S. B. No. 163

Senator Miller, R. 

Cosponsors: Senators Miller, D., Sawyer, Strahorn, Smith 

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A BILL

To amend section 3901.21 of the Revised Code to

1

prohibit an insurer's use of a credit score,

2

credit history, or credit report in fixing a

3

premium rate for, or the terms and conditions of,

4

an insurance policy, or in determining whether to

5

issue, continue, or renew an insurance policy.

6

BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF OHIO:

Section 1. That section 3901.21 of the Revised Code be	7
amended to read as follows:	8

Sec. 3901.21.  The following are hereby defined as unfair and	9
deceptive acts or practices in the business of insurance:	10

(A) Making, issuing, circulating, or causing or permitting to	11
be made, issued, or circulated, or preparing with intent to so	12
use, any estimate, illustration, circular, or statement	13
misrepresenting the terms of any policy issued or to be issued or	14
the benefits or advantages promised thereby or the dividends or	15
share of the surplus to be received thereon, or making any false	16
or misleading statements as to the dividends or share of surplus	17
previously paid on similar policies, or making any misleading	18
representation or any misrepresentation as to the financial	19
condition of any insurer as shown by the last preceding verified	20
statement made by it to the insurance department of this state, or	21
as to the legal reserve system upon which any life insurer	22
operates, or using any name or title of any policy or class of	23
policies misrepresenting the true nature thereof, or making any	24
misrepresentation or incomplete comparison to any person for the	25
purpose of inducing or tending to induce such person to purchase,	26
amend, lapse, forfeit, change, or surrender insurance.	27

Any written statement concerning the premiums for a policy	28
which refers to the net cost after credit for an assumed dividend,	29
without an accurate written statement of the gross premiums, cash	30
values, and dividends based on the insurer's current dividend	31
scale, which are used to compute the net cost for such policy, and	32
a prominent warning that the rate of dividend is not guaranteed,	33
is a misrepresentation for the purposes of this division.	34

(B) Making, publishing, disseminating, circulating, or	35
placing before the public or causing, directly or indirectly, to	36
be made, published, disseminated, circulated, or placed before the	37
public, in a newspaper, magazine, or other publication, or in the	38
form of a notice, circular, pamphlet, letter, or poster, or over	39
any radio station, or in any other way, or preparing with intent	40
to so use, an advertisement, announcement, or statement containing	41
any assertion, representation, or statement, with respect to the	42
business of insurance or with respect to any person in the conduct	43
of the person's insurance business, which is untrue, deceptive, or	44
misleading.	45

(C) Making, publishing, disseminating, or circulating,	46
directly or indirectly, or aiding, abetting, or encouraging the	47
making, publishing, disseminating, or circulating, or preparing	48
with intent to so use, any statement, pamphlet, circular, article,	49
or literature, which is false as to the financial condition of an	50
insurer and which is calculated to injure any person engaged in	51
the business of insurance.	52

(D) Filing with any supervisory or other public official, or	53
making, publishing, disseminating, circulating, or delivering to	54
any person, or placing before the public, or causing directly or	55
indirectly to be made, published, disseminated, circulated,	56
delivered to any person, or placed before the public, any false	57
statement of financial condition of an insurer.	58

Making any false entry in any book, report, or statement of	59
any insurer with intent to deceive any agent or examiner lawfully	60
appointed to examine into its condition or into any of its	61
affairs, or any public official to whom such insurer is required	62
by law to report, or who has authority by law to examine into its	63
condition or into any of its affairs, or, with like intent,	64
willfully omitting to make a true entry of any material fact	65
pertaining to the business of such insurer in any book, report, or	66
statement of such insurer, or mutilating, destroying, suppressing,	67
withholding, or concealing any of its records.	68

(E) Issuing or delivering or permitting agents, officers, or	69
employees to issue or deliver agency company stock or other	70
capital stock or benefit certificates or shares in any common-law	71
corporation or securities or any special or advisory board	72
contracts or other contracts of any kind promising returns and	73
profits as an inducement to insurance.	74

(F) Making or permitting any unfair discrimination among	75
individuals of the same class and equal expectation of life in the	76
rates charged for any contract of life insurance or of life	77
annuity or in the dividends or other benefits payable thereon, or	78
in any other of the terms and conditions of such contract.	79

(G)(1) Except as otherwise expressly provided by law,	80
knowingly permitting or offering to make or making any contract of	81
life insurance, life annuity or accident and health insurance, or	82
agreement as to such contract other than as plainly expressed in	83
the contract issued thereon, or paying or allowing, or giving or	84
offering to pay, allow, or give, directly or indirectly, as	85
inducement to such insurance, or annuity, any rebate of premiums	86
payable on the contract, or any special favor or advantage in the	87
dividends or other benefits thereon, or any valuable consideration	88
or inducement whatever not specified in the contract; or giving,	89
or selling, or purchasing, or offering to give, sell, or purchase,	90
as inducement to such insurance or annuity or in connection	91
therewith, any stocks, bonds, or other securities, or other	92
obligations of any insurance company or other corporation,	93
association, or partnership, or any dividends or profits accrued	94
thereon, or anything of value whatsoever not specified in the	95
contract.	96

(2) Nothing in division (F) or division (G)(1) of this	97
section shall be construed as prohibiting any of the following	98
practices: (a) in the case of any contract of life insurance or	99
life annuity, paying bonuses to policyholders or otherwise abating	100
their premiums in whole or in part out of surplus accumulated from	101
nonparticipating insurance, provided that any such bonuses or	102
abatement of premiums shall be fair and equitable to policyholders	103
and for the best interests of the company and its policyholders;	104
(b) in the case of life insurance policies issued on the	105
industrial debit plan, making allowance to policyholders who have	106
continuously for a specified period made premium payments directly	107
to an office of the insurer in an amount which fairly represents	108
the saving in collection expenses; (c) readjustment of the rate of	109
premium for a group insurance policy based on the loss or expense	110
experience thereunder, at the end of the first or any subsequent	111
policy year of insurance thereunder, which may be made retroactive	112
only for such policy year.	113

(H) Making, issuing, circulating, or causing or permitting to	114
be made, issued, or circulated, or preparing with intent to so	115
use, any statement to the effect that a policy of life insurance	116
is, is the equivalent of, or represents shares of capital stock or	117
any rights or options to subscribe for or otherwise acquire any	118
such shares in the life insurance company issuing that policy or	119
any other company.	120

(I) Making, issuing, circulating, or causing or permitting to	121
be made, issued or circulated, or preparing with intent to so	122
issue, any statement to the effect that payments to a policyholder	123
of the principal amounts of a pure endowment are other than	124
payments of a specific benefit for which specific premiums have	125
been paid.	126

(J) Making, issuing, circulating, or causing or permitting to	127
be made, issued, or circulated, or preparing with intent to so	128
use, any statement to the effect that any insurance company was	129
required to change a policy form or related material to comply	130
with Title XXXIX of the Revised Code or any regulation of the	131
superintendent of insurance, for the purpose of inducing or	132
intending to induce any policyholder or prospective policyholder	133
to purchase, amend, lapse, forfeit, change, or surrender	134
insurance.	135

(K) Aiding or abetting another to violate this section.

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(L) Refusing to issue any policy of insurance, or canceling	137
or declining to renew such policy because of the sex or marital	138
status of the applicant, prospective insured, insured, or	139
policyholder.	140

(M)(1) Making or permitting any unfair discrimination between	141
individuals of the same class and of essentially the same hazard	142
in the amount of premium, policy fees, or rates charged for any	143
policy or contract of insurance, other than life insurance, or in	144
the benefits payable thereunder, or in underwriting standards and	145
practices or eligibility requirements, or in any of the terms or	146
conditions of such contract, or in any other manner whatever.	147

(2) Considering an individual's credit score, credit report,	148
or credit history in determining a premium, policy fee, or rate	149
charged for, in setting the coverage provided by, benefits	150
payable under, or other terms and conditions of, or in refusing	151
to issue, canceling, or refusing to renew, any policy or	152
contract of insurance.	153

For purposes of division (M)(2) of this section, "credit	154
score," "credit report," and "credit history" mean any written,	155
oral, or other communication of any information bearing on a	156
consumer's creditworthiness, credit standing, or credit capacity.	157

(N) Refusing to make available disability income insurance	158
solely because the applicant's principal occupation is that of	159
managing a household.	160

(O) Refusing, when offering maternity benefits under any	161
individual or group sickness and accident insurance policy, to	162
make maternity benefits available to the policyholder for the	163
individual or individuals to be covered under any comparable	164
policy to be issued for delivery in this state, including family	165
members if the policy otherwise provides coverage for family	166
members. Nothing in this division shall be construed to prohibit	167
an insurer from imposing a reasonable waiting period for such	168
benefits under an individual sickness and accident insurance	169
policy issued to an individual who is not a federally eligible	170
individual or a nonemployer-related group sickness and accident	171
insurance policy, but in no event shall such waiting period exceed	172
two hundred seventy days.	173

For purposes of division (O) of this section, "federally	174
eligible individual" means an eligible individual as defined in 45	175
C.F.R. 148.103.	176

(P) Using, or permitting to be used, a pattern settlement as	177
the basis of any offer of settlement. As used in this division,	178
"pattern settlement" means a method by which liability is	179
routinely imputed to a claimant without an investigation of the	180
particular occurrence upon which the claim is based and by using a	181
predetermined formula for the assignment of liability arising out	182
of occurrences of a similar nature. Nothing in this division shall	183
be construed to prohibit an insurer from determining a claimant's	184
liability by applying formulas or guidelines to the facts and	185
circumstances disclosed by the insurer's investigation of the	186
particular occurrence upon which a claim is based.	187

(Q) Refusing to insure, or refusing to continue to insure, or	188
limiting the amount, extent, or kind of life or sickness and	189
accident insurance or annuity coverage available to an individual,	190
or charging an individual a different rate for the same coverage	191
solely because of blindness or partial blindness. With respect to	192
all other conditions, including the underlying cause of blindness	193
or partial blindness, persons who are blind or partially blind	194
shall be subject to the same standards of sound actuarial	195
principles or actual or reasonably anticipated actuarial	196
experience as are sighted persons. Refusal to insure includes, but	197
is not limited to, denial by an insurer of disability insurance	198
coverage on the grounds that the policy defines "disability" as	199
being presumed in the event that the eyesight of the insured is	200
lost. However, an insurer may exclude from coverage disabilities	201
consisting solely of blindness or partial blindness when such	202
conditions existed at the time the policy was issued. To the	203
extent that the provisions of this division may appear to conflict	204
with any provision of section 3999.16 of the Revised Code, this	205
division applies.	206

(R)(1) Directly or indirectly offering to sell, selling, or	207
delivering, issuing for delivery, renewing, or using or otherwise	208
marketing any policy of insurance or insurance product in	209
connection with or in any way related to the grant of a student	210
loan guaranteed in whole or in part by an agency or commission of	211
this state or the United States, except insurance that is required	212
under federal or state law as a condition for obtaining such a	213
loan and the premium for which is included in the fees and charges	214
applicable to the loan; or, in the case of an insurer or insurance	215
agent, knowingly permitting any lender making such loans to engage	216
in such acts or practices in connection with the insurer's or	217
agent's insurance business.	218

(2) Except in the case of a violation of division (G) of this	219
section, division (R)(1) of this section does not apply to either	220
of the following:	221

(a) Acts or practices of an insurer, its agents,	222
representatives, or employees in connection with the grant of a	223
guaranteed student loan to its insured or the insured's spouse or	224
dependent children where such acts or practices take place more	225
than ninety days after the effective date of the insurance;	226

(b) Acts or practices of an insurer, its agents,	227
representatives, or employees in connection with the solicitation,	228
processing, or issuance of an insurance policy or product covering	229
the student loan borrower or the borrower's spouse or dependent	230
children, where such acts or practices take place more than one	231
hundred eighty days after the date on which the borrower is	232
notified that the student loan was approved.	233

(S) Denying coverage, under any health insurance or health	234
care policy, contract, or plan providing family coverage, to any	235
natural or adopted child of the named insured or subscriber solely	236
on the basis that the child does not reside in the household of	237
the named insured or subscriber.	238

(T)(1) Using any underwriting standard or engaging in any	239
other act or practice that, directly or indirectly, due solely to	240
any health status-related factor in relation to one or more	241
individuals, does either of the following:	242

(a) Terminates or fails to renew an existing individual	243
policy, contract, or plan of health benefits, or a health benefit	244
plan issued to an employer, for which an individual would	245
otherwise be eligible;	246

(b) With respect to a health benefit plan issued to an	247
employer, excludes or causes the exclusion of an individual from	248
coverage under an existing employer-provided policy, contract, or	249
plan of health benefits.	250

(2) The superintendent of insurance may adopt rules in	251
accordance with Chapter 119. of the Revised Code for purposes of	252
implementing division (T)(1) of this section.	253

(3) For purposes of division (T)(1) of this section, "health	254
status-related factor" means any of the following:	255

(a) Health status;

256

(b) Medical condition, including both physical and mental	257
illnesses;	258

(c) Claims experience;

259

(d) Receipt of health care;

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(e) Medical history;

261

(f) Genetic information;

262

(g) Evidence of insurability, including conditions arising	263
out of acts of domestic violence;	264

(h) Disability.

265

(U) With respect to a health benefit plan issued to a small	266
employer, as those terms are defined in section 3924.01 of the	267
Revised Code, negligently or willfully placing coverage for	268
adverse risks with a certain carrier, as defined in section	269
3924.01 of the Revised Code.	270

(V) Using any program, scheme, device, or other unfair act or	271
practice that, directly or indirectly, causes or results in the	272
placing of coverage for adverse risks with another carrier, as	273
defined in section 3924.01 of the Revised Code.	274

(W) Failing to comply with section 3923.23, 3923.231,	275
3923.232, 3923.233, or 3923.234 of the Revised Code by engaging in	276
any unfair, discriminatory reimbursement practice.	277

(X) Intentionally establishing an unfair premium for, or	278
misrepresenting the cost of, any insurance policy financed under a	279
premium finance agreement of an insurance premium finance company.	280

(Y)(1)(a) Limiting coverage under, refusing to issue,	281
canceling, or refusing to renew, any individual policy or contract	282
of life insurance, or limiting coverage under or refusing to issue	283
any individual policy or contract of health insurance, for the	284
reason that the insured or applicant for insurance is or has been	285
a victim of domestic violence;	286

(b) Adding a surcharge or rating factor to a premium of any	287
individual policy or contract of life or health insurance for the	288
reason that the insured or applicant for insurance is or has been	289
a victim of domestic violence;	290

(c) Denying coverage under, or limiting coverage under, any	291
policy or contract of life or health insurance, for the reason	292
that a claim under the policy or contract arises from an incident	293
of domestic violence;	294

(d) Inquiring, directly or indirectly, of an insured under,	295
or of an applicant for, a policy or contract of life or health	296
insurance, as to whether the insured or applicant is or has been a	297
victim of domestic violence, or inquiring as to whether the	298
insured or applicant has sought shelter or protection from	299
domestic violence or has sought medical or psychological treatment	300
as a victim of domestic violence.	301

(2) Nothing in division (Y)(1) of this section shall be	302
construed to prohibit an insurer from inquiring as to, or from	303
underwriting or rating a risk on the basis of, a person's physical	304
or mental condition, even if the condition has been caused by	305
domestic violence, provided that all of the following apply:	306

(a) The insurer routinely considers the condition in	307
underwriting or in rating risks, and does so in the same manner	308
for a victim of domestic violence as for an insured or applicant	309
who is not a victim of domestic violence;	310

(b) The insurer does not refuse to issue any policy or	311
contract of life or health insurance or cancel or refuse to renew	312
any policy or contract of life insurance, solely on the basis of	313
the condition, except where such refusal to issue, cancellation,	314
or refusal to renew is based on sound actuarial principles or is	315
related to actual or reasonably anticipated experience;	316

(c) The insurer does not consider a person's status as being	317
or as having been a victim of domestic violence, in itself, to be	318
a physical or mental condition;	319

(d) The underwriting or rating of a risk on the basis of the	320
condition is not used to evade the intent of division (Y)(1) of	321
this section, or of any other provision of the Revised Code.	322

(3)(a) Nothing in division (Y)(1) of this section shall be	323
construed to prohibit an insurer from refusing to issue a policy	324
or contract of life insurance insuring the life of a person who is	325
or has been a victim of domestic violence if the person who	326
committed the act of domestic violence is the applicant for the	327
insurance or would be the owner of the insurance policy or	328
contract.	329

(b) Nothing in division (Y)(2) of this section shall be	330
construed to permit an insurer to cancel or refuse to renew any	331
policy or contract of health insurance in violation of the "Health	332
Insurance Portability and Accountability Act of 1996," 110 Stat.	333
1955, 42 U.S.C.A. 300gg-41(b), as amended, or in a manner that	334
violates or is inconsistent with any provision of the Revised Code	335
that implements the "Health Insurance Portability and	336
Accountability Act of 1996."	337

(4) An insurer is immune from any civil or criminal liability	338
that otherwise might be incurred or imposed as a result of any	339
action taken by the insurer to comply with division (Y) of this	340
section.	341

(5) As used in division (Y) of this section, "domestic	342
violence" means any of the following acts:	343

(a) Knowingly causing or attempting to cause physical harm to	344
a family or household member;	345

(b) Recklessly causing serious physical harm to a family or	346
household member;	347

(c) Knowingly causing, by threat of force, a family or	348
household member to believe that the person will cause imminent	349
physical harm to the family or household member.	350

For the purpose of division (Y)(5) of this section, "family	351
or household member" has the same meaning as in section 2919.25 of	352
the Revised Code.	353

Nothing in division (Y)(5) of this section shall be construed	354
to require, as a condition to the application of division (Y) of	355
this section, that the act described in division (Y)(5) of this	356
section be the basis of a criminal prosecution.	357

(Z) Disclosing a coroner's records by an insurer in violation	358
of section 313.10 of the Revised Code.	359

(AA) Making, issuing, circulating, or causing or permitting	360
to be made, issued, or circulated any statement or representation	361
that a life insurance policy or annuity is a contract for the	362
purchase of funeral goods or services.	363

With respect to private passenger automobile insurance, no	364
insurer shall charge different premium rates to persons residing	365
within the limits of any municipal corporation based solely on the	366
location of the residence of the insured within those limits.	367

The enumeration in sections 3901.19 to 3901.26 of the Revised	368
Code of specific unfair or deceptive acts or practices in the	369
business of insurance is not exclusive or restrictive or intended	370
to limit the powers of the superintendent of insurance to adopt	371
rules to implement this section, or to take action under other	372
sections of the Revised Code.	373

This section does not prohibit the sale of shares of any	374
investment company registered under the "Investment Company Act of	375
1940," 54 Stat. 789, 15 U.S.C.A. 80a-1, as amended, or any	376
policies, annuities, or other contracts described in section	377
3907.15 of the Revised Code.	378

As used in this section, "estimate," "statement,"	379
"representation," "misrepresentation," "advertisement," or	380
"announcement" includes oral or written occurrences.	381

Section 2. That existing section 3901.21 of the Revised Code	382
is hereby repealed.	383