72nd OREGON LEGISLATIVE ASSEMBLY--2003 Regular Session
Enrolled
Senate Bill 260
Sponsored by Senators COURTNEY, HANNON, RINGO, Representative
GARRARD; Senators BURDICK, CORCORAN, DEVLIN, METSGER,
MORRISETTE, WALKER, Representatives ACKERMAN, ANDERSON,
AVAKIAN, DALTO, DINGFELDER, GREENLICK, HASS, KAFOURY, KRUMMEL,
MARCH, MERKLEY, NELSON, ZAUNER
CHAPTER ................
AN ACT
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
Enrolled Senate Bill 260 (SB 260-C) Page 1
{ - 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
(c) Furnishes consumer reports to other persons.
(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.
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(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
(c) A natural person acting in a personal capacity rather than
in a business or professional capacity.
{ + (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:
Enrolled Senate Bill 260 (SB 260-C) Page 3
{ - (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
(c) Payment for the provision of health care to an individual.
{ - (21) - } { + (23) + } 'Nonaffiliated third party' means
any person except:
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(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
(c) As designated by the director by rule.
{ - (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.
(c) Misrepresents the true purpose of the interview.
(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.
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{ - (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.
{ + (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. + }
(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.
(C) The rescission of a policy.
(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
Enrolled Senate Bill 260 (SB 260-C) Page 6
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
(c) Furnishes consumer reports to other persons.
(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) '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
(c) A health care clearinghouse.
{ + (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:
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(a) Quality assessment, accreditation, auditing and improvement
activities;
(b) Case management and care coordination;
(c) Reviewing the competence, qualifications or performance of
health care providers or health insurers;
(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;
Enrolled Senate Bill 260 (SB 260-C) Page 8
(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
(C) The past, present or future payment for the provision of
health care to an individual.
{ - (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;
(C) A student health insurance policy;
(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;
(c) Is a past, present or proposed policyowner;
(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
(C) The past, present or future payment for the provision of
health care to an individual.
{ - (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
Enrolled Senate Bill 260 (SB 260-C) Page 9
(c) A natural person acting in a personal capacity rather than
in a business or professional capacity.
{ + (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
(c) As designated by the director by rule.
{ - (26) - } { + (28) + } 'Payment' includes but is not
limited to:
(a) Efforts to obtain premiums or reimbursement;
(b) Determining eligibility or coverage;
(c) Billing activities;
(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
Enrolled Senate Bill 260 (SB 260-C) Page 10
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
(c) Protected health information.
{ + (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
(c) A person appointed as a personal representative under ORS
chapter 113.
{ - (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.
(c) Misrepresents the true purpose of the interview.
(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.
Enrolled Senate Bill 260 (SB 260-C) Page 11
{ - (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
(C) Employment records held by a covered entity in its role as
employer.
{ - (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 + }
Enrolled Senate Bill 260 (SB 260-C) Page 12
(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: + }
Enrolled Senate Bill 260 (SB 260-C) Page 13
746.650. (1) In the event of an adverse underwriting
decision { + , + } the insurer or insurance producer 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 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 + }
(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 insurance producer 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 insurance producer prefers.
(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.
(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 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:
Enrolled Senate Bill 260 (SB 260-C) Page 14
(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:
(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 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.
Enrolled Senate Bill 260 (SB 260-C) Page 15
(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. + }
Enrolled Senate Bill 260 (SB 260-C) Page 16
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
(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.
(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. + }
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Enrolled Senate Bill 260 (SB 260-C) Page 17
Passed by Senate April 23, 2003
Repassed by Senate August 20, 2003
...........................................................
Secretary of Senate
...........................................................
President of Senate
Passed by House August 15, 2003
...........................................................
Speaker of House
Enrolled Senate Bill 260 (SB 260-C) Page 18
Received by Governor:
......M.,............., 2003
Approved:
......M.,............., 2003
...........................................................
Governor
Filed in Office of Secretary of State:
......M.,............., 2003
...........................................................
Secretary of State
Enrolled Senate Bill 260 (SB 260-C) Page 19