Motor vehicle insurance; use of certain factors to establish rates prohibited.

Plain English Breakdown

The official source material does not provide details on enforcement mechanisms for violations of the bill's provisions.

Motor Vehicle Insurance; Prohibiting Use of Credit Information

This bill stops insurance companies from using credit scores or information to set rates for car insurance in Virginia.

What This Bill Does

• Stops insurers from using consumer credit information or scores when setting rates for motor vehicle insurance policies.
• Forbids insurers from refusing, limiting, or charging different rates based on an individual's credit score or information.

Who It Names or Affects

• Insurance companies that provide motor vehicle insurance in Virginia.
• People who buy or renew motor vehicle insurance in Virginia.

Terms To Know

Consumer Credit Information

Information about a person's credit history, such as payment records and credit scores.

Credit-Based Insurance Score

A score used by insurance companies to predict the likelihood of filing an insurance claim based on a person’s credit information.

Limits and Unknowns

• The bill does not specify what happens if insurers violate these rules.
• It is unclear how the study's findings will be implemented or enforced.

Official Summary Text

Motor vehicle insurance; use of certain factors to establish rates prohibited.
Prohibits an insurer from using any classification system, rating plan, rules or rates, or modifications based in whole or in part on consumer credit information or scores to establish rates for any motor vehicle insurance policy issued or renewed in the Commonwealth. The bill also prohibits an insurer from refusing to provide or refusing to continue to provide an individual with motor vehicle insurance coverage, limiting the amount or extent of motor vehicle insurance coverage, or charging an individual a different rate for the same motor vehicle insurance coverage solely because of an individual's consumer credit information or score.

Current Bill Text

HOUSE BILL NO. 1228

AMENDMENT IN THE NATURE OF A SUBSTITUTE

(Proposed by the House Committee on Labor and Commerce

on ________________)

(Patron Prior to Substitute--Delegate O'Quinn)

A BILL to direct the Bureau of Insurance to study the use of consumer credit information by insurers in connection with underwriting motor vehicle insurance policies.

Be it enacted by the General Assembly of Virginia:

1.
§ 1.
That the State Corporation Commission's Bureau of Insurance (the Bureau) shall study the use by insurers of an insured's or applicant's consumer credit information or credit-based insurance score in connection with underwriting motor vehicle insurance policies. In conducting its study, the Bureau shall (i) examine §§
38.2-2212
,
38.2-2213
, and
38.2-2234
of the Code of Virginia to determine if those provisions unfairly burden motor vehicle insurance policyholders; (ii) determine whether the use of an insured's or applicant's consumer credit information or credit-based insurance score, rather than relying on the insured's or applicant's driving record and other factors proximately related to risks of operating a motor vehicle, in setting insurance premiums and tier ratings is appropriate; and (iii) determine whether the use of an insured's or applicant's consumer credit information or credit-based insurance score in setting insurance premiums and tier ratings discriminates against poorer or younger people who either have had challenges with credit or have no credit history. The Department of Motor Vehicles shall assist the Bureau in conducting its study. The Bureau shall submit a report of its findings and recommendations to the Chairs of the House Committee on Labor and Commerce and the Senate Committee on Commerce and Labor by October 1, 2026.