Prohibits the consideration of an applicant's credit history in determining automobile insurance rates.
Impact
The impact of this legislation on state laws could be significant, particularly in the realm of consumer rights and insurance practices. By eliminating credit history as a factor in setting rates, the bill aims to protect individuals from potential biases that often lead to higher premiums for those with less favorable credit histories. This change could help lower the financial burden on consumers, especially those who may be economically disadvantaged or have faced unexpected financial challenges in the past.
Summary
S2763 is a legislative bill introduced in the Rhode Island General Assembly aimed at reforming how automobile liability insurance rates are determined. Specifically, the bill proposes an amendment to the Motor Vehicle Reparations Act that would prohibit insurance companies from considering an individual's credit history or credit score when calculating their insurance premiums. Instead, the bill emphasizes the importance of the applicant's past claim experience as the primary factor in determining rates, aligning with practices used in other states that utilize 'merit rating' or 'experience rating' systems.
Contention
Despite the potential benefits, the bill might face contention from various stakeholders within the insurance industry. Some insurers may argue that credit scores can be predictive of risk, and that their removal from consideration could lead to increased risk and potentially higher rates for all insured. Additionally, there may be concerns raised regarding the sustainability of insurance pools and overall financial viability, particularly from companies that rely on credit evaluations as a fundamental part of their risk assessment procedures.
Amends sections of law relative to historic tax credits including increasing the maximum project credit and implementing requirements relative to following prevailing wage requirements..
Forbids a motor vehicle liability insurance carrier from considering the zip code of where an insured lives for purposes of calculating their policy premium.
Forbids a motor vehicle liability insurance carrier from considering the zip code of where an insured lives for purposes of calculating their policy premium.
Prohibits casualty insurers from assessing any premium surcharge or penalty against an insured solely for inquiring about the terms of the insured's policy.
Prohibits casualty insurers from assessing any premium surcharge or penalty against an insured solely for inquiring about the terms of the insured's policy.
Prohibits employers from seeking/using credit reports in making hiring decisions concerning prospective employees, asking questions about the applicant's financial past during interviews or including credit history questions in their job applications.
Prohibits insurance companies from paying a rate that is less than the approved Medicaid rate set by the executive office of health and human services.
Requires homeowner’s insurance providers to provide two months’ notice before increasing any policy more that 20%. Also caps rate increases for policy holders that are 65 years of age or older and meet certain income limits.