1. (1) Insurers shall not deny personal insurance coverage, calculate an insurance score, determine personal insurance premiums or rates, or place an applicant in a tier based in whole or in part on the following types of credit history:

   1. (a) An applicant’s number of credit inquiries unless said insurer files and the Department concurs with actuarial documentation which supports other practices.
   2. (b) The type of credit card, charge card, or debit card used by an applicant.
2. (2) Insurers shall not deny personal insurance coverage based solely on a lack of credit history (“no-hit”) or incomplete credit history (“thin file”) if the insurer has received accurate and complete information from the applicant.
3. (3) Insurers shall not refuse to insure an applicant based solely on the applicant’s credit history.
4. (4) Insurers shall not rely solely on an applicant’s credit history when electing to cancel or non-renew a policy.
5. (5) Insurers shall not use credit history or insurance score for any arbitrary, capricious, or unfairly discriminatory reason.
6. (6) Insurers shall not request an applicant’s credit history or an insurance score based wholly or partially on residence, sex, race, color, creed, occupation, income, physical handicap, disability of an applicant.
7. (7) Insurers shall not refuse to issue or renew a policy solely because the applicant or insured does not possess a credit card.

8. (8) Insurers or Third Parties shall not use the following as a negative factor in any insurance scoring model or in reviewing credit information for the purpose of underwriting or rating a policy of personal insurance:

   1. (a) Credit inquiries not initiated by the applicant or inquiries requested by the applicant for his or her own credit information, if so identified on the applicant’s credit report.
   2. (b) Inquiries relating to insurance coverage, if so identified on the applicant’s credit report.
   3. (c) Collection accounts with a medical industry code, if so identified on the applicant’s credit report.
   4. (d) Multiple lender inquiries, if coded by the applicant reporting agency on the applicant’s credit report as being from the home mortgage industry and/or the automobile lending industry made within 30 days of one another, unless only one inquiry is considered.

Author: Commissioner of Insurance

Statutory Authority: Code of Ala. 1975, §27-2-17.

History: New Rule: May 21, 2003, effective June 7, 2003. Filed with LRS May 28, 2003. Rule is not subject to the Alabama Administrative Procedure Act.