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Delaware General AssemblyDelaware RegulationsMonthly Register of RegulationsJanuary 2018

Regulatory Flexibility Act Form

Authenticated PDF Version

(18 Del.C. §§311, 2501, 2304(15)(c), & 2312)
18 DE Admin. Code 906
This regulation is adopted by the Commissioner pursuant to the authority granted by 18 Del.C. §§ 311, 2501, 2304(15)(c), and 2312, and promulgated in accordance with the Delaware Administrative Procedures Act, 29 Del.C. Chapter 101.
3.3 To assure that applicants are given notice when consumer reports will be requested and reviewed in connection with their eligibility for insurance coverage and/or their tier or level of premium payment.
3.4 To prohibit the practice of assigning an applicant to a premium level based solely on the applicant's credit rating or credit score.
“Adverse action” has the meaning given that term in the Fair Credit Reporting Act, 15 U.S.C. sec. 1681 et seq. (referred to in this regulation as “the FCRA”). An adverse action includes but is not limited to the following:
Applicant" shall mean an applicant for insurance coverage but shall not include persons receiving a quote for premium that would be due under a policy of insurance, provided however, that such insurance is not ultimately applied for and that the process for making and delivering such quotes is not used as a means for denying coverage on the basis of a credit score in violation of this regulation.
“Commissioner” shall mean the Insurance Commissioner of the State of Delaware, or any person designated by the Commissioner to enforce the provisions of this regulation or any related statute or regulation.
"Consumer" shall mean applicants or policyholders.
“Consumer report” means any written, oral, or other communication of any information by a consumer reporting agency (as defined in the FCRA) bearing on a consumer's credit worthiness, credit standing, or credit capacity, which is used or expected to be used or collected in whole or in part for the purpose of serving as a factor in establishing the consumer's eligibility for personal lines automobile or homeowner insurance to be used primarily for person, family, or household purposes. Consumer report shall not include motor vehicle reports or claims history reports or any other report that is not credit related.
“Credit score” means any alpha, numeric and/or alpha-numeric rating or classification of any person based on information contained in said person’s consumer report created by an insurer or any person, firm or entity for use by an insurer.
“Document” or “public record” shall have the same meaning as described in 29 Del.C. §10002(d) and 18 Del.C. §§320, 321.
“Insurance score” shall have the same meaning as “credit score.”
“Policyholdershall mean person or persons insured under a policy of insurance.
5.2 Each insurer proposing to use an insurance score as part of its rating or underwriting criteria shall file with the Commissioner, as part of its rate filings required pursuant to 18 Del.C. Ch. 25, such supporting models, algorithms, actuarial and statistical data and reports sufficient, in the discretion of the Commissioner, to permit the Commissioner to determine:
6.1.3 On an annual basis, the insurer shall inform its policyholders of their right to have their credit information reviewed to determine whether the use of the current credit report would result in a lower premium, in accordance with the procedures set forth in section 8 of this Regulation. This notification shall be prominently included in at least 18 point type in the renewal notification. The notification shall be accompanied by a form that the policyholder must complete and send to the insured to request that the credit report be obtained and reviewed. The notification shall inform the policyholder that the policyholder must mail the request form within two weeks of the date of mailing of the renewal notification by the insurer in order for the re-rating to occur in time for a premium adjustment to be made for the upcoming policy period. The notification shall also inform the policyholder that they must comply with the renewal notice's requirements regarding the payment amount and due date regardless of whether they choose to request a review of their credit report, and that any decrease in premium as a result of the credit review will be effective as of the upcoming renewal date provided in the renewal notice. This subsection does not apply to any renewal for which the insurer’s filed rating plan does not use any credit information, including residual effect from the use of credit information at initial underwriting. An insurer that is exempt from this subsection shall inform its policyholder of the exemption and the reason for the exemption in the policyholder’s renewal notification.
6.2 A notice denying an application for insurance shall, to the extent that the insurer’s action is based on information contained in a consumer report relating to the applicant and/or other named person, contain the following:
7.3 A consumer, upon written request to an insurer, shall have a right to seek review by the insurer of its use of a credit score in the event a consumer's credit report is adversely affected by extraordinary personal circumstances.
9.2 No insurer shall implement credit scoring for rate making or underwriting purposes without first having obtained the approval of the Commissioner as part of a rate filing under 18 Del.C. Ch. 25. Policies and renewal notices issued on or before September 1, 2003, in which credit information was used in the underwriting or rating of the policy shall be deemed valid for the term thereof but not for any renewal thereunder in the absence of compliance with this regulation.
10.1 Any document, report, model or other supporting information filed with the Commissioner, irrespective of the format or media in which it is contained, shall be considered proprietary or trade secret and subject to the confidentiality provisions of 18 Del.C. §321(g) and/or, upon the request of the insurer or owner of the document, 29 Del.C. §10002(d)(2). Where an insurer or third party is required to file proprietary or trade secret insurance scoring algorithms, models, documents or supporting information as part of its filed rates, the insurer or third party may elect to segregate such materials from the remainder of its rate filing by filing such materials separately in a sealed envelope or container. Materials filed in this manner shall remain segregated from the publicly accessible portions of the rate filing for so long as these materials are on file with the Department, or until the insurer or third party notifies the Department that such materials are no longer proprietary or trade secret. In the event there is a dispute with respect to the confidentiality of a document, the Commissioner shall make the final determination of whether any part or the whole of a disputed document shall be given confidential treatment.
This regulation shall not create a cause of action for any person or entity, other than the Delaware Insurance Commissioner, against an insurer or its representative based upon a violation of 18 Del.C. §2304(15)(c). In the same manner, nothing in this regulation shall establish a defense for any party to any cause of action based upon a violation of 18 Del.C. §2304(15)(c).
Last Updated: December 31 1969 19:00:00.
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