SB 340 - This act prohibits insurers from taking adverse action based upon a person's credit report. The current law allow insurers to use credit reports under certain conditions. The notification and procedural aspects of the current law are eliminated as insurers are totally prohibited from taking adverse actions in toto. The act also modifies the definition of "adverse action" to have the same meaning as provided in federal law. Adverse actions include cancellation, denial, or non-renewal of personal insurance coverage or any unfavorable change in the terms of coverage, including charging a higher premium.
This act adds several specific types of insurance products to the definition of an insurance "contract". The current law on the use of credit information only applies to automobile insurance policies and certain property insurance policies. This act applies to a variety of homeowner policies, automobile policies, motorcycle policies, and various watercraft policies. The act also applies to professional liability and malpractice liability policies.