                                 CODE OF VIRGINIA

INSURANCE CREDIT SCORE DISCLOSURE; USE OF CREDIT INFORMATION (§ 38.2-2234)

A. Any insurer issuing or delivering a policy of motor vehicle insurance in this
Commonwealth, as defined in § 38.2-2212, that uses credit information contained
in a consumer report for underwriting, tier placement or rating an applicant or
insured shall meet the following requirements:

   1. Disclose, either on the insurance application or at the time the insurance
   application is taken (i) that it shall obtain credit information in connection
   with such application, (ii) that the insured may request that his credit
   information be updated; and (iii) that, if the insured questions the accuracy
   of the credit information, the insurer will, upon request of the insured,
   reevaluate the insured based on corrected credit information from a consumer
   reporting agency. The disclosure may be made by the insurer or its agent. Such
   disclosure shall be either written or provided to an applicant in the same
   medium as the application for insurance. The insurer need not provide the
   disclosure required under this subsection to any insured on a renewal policy,
   if such insured has previously been provided a disclosure. Use of the
   following example disclosure constitutes compliance with this subsection:
   &#8220;In connection with this application for insurance, we shall review your
   credit report or obtain or use an insurance credit score based on the
   information contained in that credit report. We may use a third party in
   connection with the development of your insurance credit score. You may
   request that your credit information be updated and if you question the
   accuracy of the credit information, we will, upon your request, reevaluate you
   based on corrected credit information from a consumer reporting agency.&#8221;

   2. If an insurer takes an adverse action, based in whole or in part, upon
   credit information, the insurer shall provide notice to the applicant or
   insured that the adverse action was based, in whole or in part, on credit
   information. Such notice shall also either include a statement advising the
   applicant or insured of the primary factors or characteristics that were used
   as the basis for the adverse action, or notify the applicant or insured that
   he may request such information. For the purposes of this section, adverse
   action means a denial, nonrenewal or cancellation of, an increase in any
   charge for or refusal to apply a discount, or placement in a less favorable
   tier, or a reduction or other adverse or unfavorable change in the terms of
   coverage or amount of, any insurance, existing or applied for, in connection
   with underwriting, tier placement or rating of insurance based on the
   applicant&#8217;s or insured&#8217;s credit information. Adverse action
   includes circumstances where due to his credit information the applicant or
   insured (i) receives a higher rate, (ii) is placed in a less favorable tier,
   and (iii) when there are multiple companies available within a group of
   insurers, receives coverage in a less favorably priced company of the group.
   Notice is required when the effect of the credit information would put the
   applicant or insured in a worse position than if the credit information had
   not been considered. In the case of renewals, the circumstances listed in
   clauses (i), (ii), and (iii) shall not be deemed adverse actions if, due to
   the insured&#8217;s credit information, the insured is not receiving a less
   favorable rate or placed in a less favorable tier or company than during the
   policy period immediately preceding renewal.

B. If an insurer uses credit information from a consumer report for tier
placement or rating of its renewal business for a policy of motor vehicle
insurance, as defined in &#xA7; 38.2-2212, issued or delivered in this
Commonwealth the insurer shall be required to update the credit information at
least once every three years, provided, however, that the insurer shall be
required to update an insured&#8217;s credit information within the three-year
period if requested by the insured. If an update request is made by the insured
at least 45 days prior to the end of the policy term, any adjustment to the
premium required by the update of the insured&#8217;s credit information shall
take effect at the first renewal following the request for update of the
insured&#8217;s credit information. If an update request is made by the insured
within 45 days of the end of the policy term, the insurer shall have the option
of applying any adjustment to the premium required by the update of the
insured&#8217;s credit information to the first renewal or the second renewal
following the request for update of the insured&#8217;s credit information. An
insurer need not update the credit information more frequently than once every
policy term. Notwithstanding the requirements of this subsection, no insurer
need obtain updated credit information if the insured has the most favorably
priced tier or rate based on his credit information.

C. Notwithstanding the provisions of subdivision A 3 of &#xA7; 38.2-1904, if an
insurer issuing or delivering a policy of motor vehicle insurance, as defined in
&#xA7; 38.2-2212, in this Commonwealth is unable to obtain credit information
from a consumer report or when an insured or applicant has insufficient credit
to produce an insurance credit score, the insurer shall underwrite, tier, or
rate the individual risk in one of the following ways: (i) as if the risk
received a neutral or average insurance credit score, as defined by the insurer,
(ii) by excluding the use of credit information as a factor and using only other
underwriting, tiering, or rating criteria, or (iii) in accordance with
established underwriting guidelines or filed tiering or rating rules. Any such
established underwriting guidelines or filed tiering or rating rules shall
consider other actuarially justified factors associated with the risk in
addition to the inability to obtain credit information or the insufficiency of
the credit information.

D. The following factors shall not be used as credit criteria or to determine an
insurance credit score for underwriting, tier placement, or rating purposes for
a policy of motor vehicle insurance, as defined in § 38.2-2212, issued or
delivered in this Commonwealth:

   1. Information that has been identified by the consumer reporting agency as
   disputed by the consumer and coded as such, if the use of such disputed
   information would result in an adverse action;

   2. Information that has been identified by the consumer reporting agency as
   related to insurance inquiries or nonconsumer-initiated inquiries and coded as
   such;

   3. Information that has been identified by the consumer reporting agency as
   related to collection accounts with a medical industry code;

   4. Information that includes multiple lender inquiries, if coded by the
   consumer reporting agency as being from the home mortgage industry and made
   within 30 days of one another, unless only one inquiry is considered;

   5. Information that includes multiple lender inquiries, if coded by the
   consumer reporting agency as being from the automobile lending industry and
   made within 30 days of one another, unless only one inquiry is considered;

   6. Income, gender, address, zip code, ethnic group, race, color, religion,
   marital status, or nationality of the consumer; or

   7. The 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.

E. No insurer shall take an adverse action against an applicant for a policy of
motor vehicle insurance, as defined in &#xA7; 38.2-2212, issued or delivered in
this Commonwealth, based on credit information, unless an insurer obtains and
uses a consumer report procured within 90 days from the date the policy is first
written.

F. Notwithstanding anything to the contrary, for a policy of motor vehicle
insurance, as defined in &#xA7; 38.2-2212, issued or delivered in this
Commonwealth, an insurer may, upon request, provide reasonable exceptions for an
individual whose credit information is directly and adversely impacted by a
catastrophic event, as determined by the insurer, including catastrophic illness
or injury or the death of a spouse or member of the same household. The insurer
may require reasonable documentation of the event prior to granting an
exception. No insurer shall be deemed out of compliance with its filed rules and
rates as a result of granting an exception pursuant to this subsection.

G. Upon the request of an insured or applicant with respect to a policy of motor
vehicle insurance, as defined in &#xA7; 38.2-2212, issued or delivered in this
Commonwealth, for a reevaluation as set forth in this section, the insurer shall
reevaluate the individual based on corrected credit information from a consumer
reporting agency. If the reevaluation results in a lower premium, the lower
premium shall be applied retroactively to the effective date of the current
policy term, and the insurer shall either refund or credit the amount to the
insured. The insurer may require reasonable documentation of the corrected
information from the consumer reporting agency prior to the reevaluation.

H. An insurer shall indemnify, defend, and hold agents harmless from and against
all liability, fees, and costs arising out of or relating to the actions,
errors, or omissions of an agent who obtains or uses credit information or
insurance credit scores for an insurer, provided the agent follows the
instructions or procedures established by the insurer and complies with any
applicable law. Nothing in this subsection shall be construed to provide an
applicant or insured with a cause of action that does not exist in the absence
of this subsection.

I. No consumer reporting agency shall provide or sell data or lists that include
any information that in whole or in part was submitted in conjunction with an
insurance inquiry about an individual&#8217;s credit information or a request
for a consumer report or an insurance credit score. Such information includes
the expiration dates of an insurance policy or any other information that may
identify time periods during which an individual&#8217;s insurance may expire
and the terms and conditions of the individual&#8217;s insurance coverage. The
restrictions provided in this subsection do not apply to data or lists the
consumer reporting agency supplies to the insurance agent from whom information
was received or the insurer on whose behalf such agent acted. Nothing in this
subsection shall be construed to restrict any insurer from being able to obtain
a claims history report or a motor vehicle report.

J. For the purposes of this section, &#8220;insurance credit score&#8221; 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 information
for the purposes of predicting the future insurance loss exposure of an
individual applicant or insured for or under a policy of motor vehicle
insurance, as defined in &#xA7; 38.2-2212, issued or delivered in this
Commonwealth.

K. The provisions of this section shall apply only to insurance purchased
primarily for personal, family, or household purposes.

HISTORY: 2003, cc. 543, 553; 2019, c. 704.