As Introduced

129th General Assembly
Regular Session
2011-2012
S. B. No. 34


Senator Tavares 

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. 136

       (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 payable 150
under, or other terms and conditions of, or in refusing to issue, 151
canceling, or refusing to renew, any policy or contract of 152
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; 260

       (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