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S. B. No. 314As IntroducedAs Introduced
|124th General Assembly|
SENATORS Roberts, Brady
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF OHIO:
To amend section 3901.21 of the Revised Code to prohibit an insurer's use of a credit history or credit score in fixing a premium rate for, or the terms and conditions of, an insurance policy, or in determining whether to issue, continue, or renew an insurance policy.
Section 1. That section 3901.21 of the Revised Code be amended to read as follows:
Sec. 3901.21. The following are hereby defined as unfair
and deceptive acts or practices in the business of insurance:
(A) Making, issuing, circulating, or causing or permitting
to be made, issued, or circulated, or preparing with intent to so
use, any estimate, illustration, circular, or statement
misrepresenting the terms of any policy issued or to be issued or
the benefits or advantages promised thereby or the dividends or
share of the surplus to be received thereon, or making any false
or misleading statements as to the dividends or share of surplus
previously paid on similar policies, or making any misleading
representation or any misrepresentation as to the financial
condition of any insurer as shown by the last preceding verified
statement made by it to the insurance department of this state,
or as to the legal reserve system upon which any life insurer
operates, or using any name or title of any policy or class of
policies misrepresenting the true nature thereof, or making any
misrepresentation or incomplete comparison to any person for the
purpose of inducing or tending to induce such person to purchase,
amend, lapse, forfeit, change, or surrender insurance.
Any written statement concerning the premiums for a policy
which refers to the net cost after credit for an assumed
dividend, without an accurate written statement of the gross
premiums, cash values, and dividends based on the insurer's
current dividend scale, which are used to compute the net cost
for such policy, and a prominent warning that the rate of
dividend is not guaranteed, is a misrepresentation for the
purposes of this division.
(B) Making, publishing, disseminating, circulating, or
placing before the public or causing, directly or indirectly, to
be made, published, disseminated, circulated, or placed before
the public, in a newspaper, magazine, or other publication, or in
the form of a notice, circular, pamphlet, letter, or poster, or
over any radio station, or in any other way, or preparing with
intent to so use, an advertisement, announcement, or statement
containing any assertion, representation, or statement, with
respect to the business of insurance or with respect to any
person in the conduct of the person's insurance business,
which is untrue,
deceptive, or misleading.
(C) Making, publishing, disseminating, or circulating,
directly or indirectly, or aiding, abetting, or encouraging the
making, publishing, disseminating, or circulating, or preparing
with intent to so use, any statement, pamphlet, circular,
article, or literature, which is false as to the financial
condition of an insurer and which is calculated to injure any
person engaged in the business of insurance.
(D) Filing with any supervisory or other public official,
or making, publishing, disseminating, circulating, or delivering
to any person, or placing before the public, or causing directly
or indirectly to be made, published, disseminated, circulated,
delivered to any person, or placed before the public, any false
statement of financial condition of an insurer.
Making any false entry in any book, report, or statement of
any insurer with intent to deceive any agent or examiner lawfully
appointed to examine into its condition or into any of its
affairs, or any public official to whom such insurer is required
by law to report, or who has authority by law to examine into its
condition or into any of its affairs, or, with like intent,
willfully omitting to make a true entry of any material fact
pertaining to the business of such insurer in any book, report,
or statement of such insurer, or mutilating, destroying,
suppressing, withholding, or concealing any of its records.
(E) Issuing or delivering or permitting agents, officers,
or employees to issue or deliver agency company stock or other
capital stock or benefit certificates or shares in any common-law
corporation or securities or any special or advisory board
contracts or other contracts of any kind promising returns and
profits as an inducement to insurance.
(F) Making or permitting any unfair discrimination among
individuals of the same class and equal expectation of life in
the rates charged for any contract of life insurance or of life
annuity or in the dividends or other benefits payable thereon, or
in any other of the terms and conditions of such contract.
(G)(1) Except as otherwise expressly provided by law,
knowingly permitting or offering to make or making any contract
of life insurance, life annuity or accident and health insurance,
or agreement as to such contract other than as plainly expressed
in the contract issued thereon, or paying or allowing, or giving
or offering to pay, allow, or give, directly or indirectly, as
inducement to such insurance, or annuity, any rebate of premiums
payable on the contract, or any special favor or advantage in the
dividends or other benefits thereon, or any valuable
consideration or inducement whatever not specified in the
contract; or giving, or selling, or purchasing, or offering to
give, sell, or purchase, as inducement to such insurance or
annuity or in connection therewith, any stocks, bonds, or other
securities, or other obligations of any insurance company or
other corporation, association, or partnership, or any dividends
or profits accrued thereon, or anything of value whatsoever not
specified in the contract.
(2) Nothing in division (F) or division (G)(1) of this
section shall be construed as prohibiting any of the following
practices: (a) in the case of any contract of life insurance or
life annuity, paying bonuses to policyholders or otherwise
abating their premiums in whole or in part out of surplus
accumulated from nonparticipating insurance, provided that any
such bonuses or abatement of premiums shall be fair and equitable
to policyholders and for the best interests of the company and
its policyholders; (b) in the case of life insurance policies
issued on the industrial debit plan, making allowance to
policyholders who have continuously for a specified period made
premium payments directly to an office of the insurer in an
amount which fairly represents the saving in collection expenses;
(c) readjustment of the rate of premium for a group insurance
policy based on the loss or expense experience thereunder, at the
end of the first or any subsequent policy year of insurance
thereunder, which may be made retroactive only for such policy
(H) Making, issuing, circulating, or causing or permitting
to be made, issued, or circulated, or preparing with intent to so
use, any statement to the effect that a policy of life insurance
is, is the equivalent of, or represents shares of capital stock
or any rights or options to subscribe for or otherwise acquire
any such shares in the life insurance company issuing that policy
or any other company.
(I) Making, issuing, circulating, or causing or permitting
to be made, issued or circulated, or preparing with intent to so
issue, any statement to the effect that payments to a
policyholder of the principal amounts of a pure endowment are
other than payments of a specific benefit for which specific
premiums have been paid.
(J) Making, issuing, circulating, or causing or permitting
to be made, issued, or circulated, or preparing with intent to so
use, any statement to the effect that any insurance company was
required to change a policy form or related material to comply
with Title XXXIX of the Revised Code or any regulation of the
superintendent of insurance, for the purpose of inducing or
intending to induce any policyholder or prospective policyholder
to purchase, amend, lapse, forfeit, change, or surrender
(K) Aiding or abetting another to violate this section.
(L) Refusing to issue any policy of insurance, or
canceling or declining to renew such policy because of the sex or
marital status of the applicant, prospective insured, insured, or
(M)(1) Making or permitting any unfair discrimination between
individuals of the same class and of essentially the same hazard
in the amount of premium, policy fees, or rates charged for any
policy or contract of insurance, other than life insurance, or in
the benefits payable thereunder, or in underwriting standards and
practices or eligibility requirements, or in any of the terms or
conditions of such contract, or in any other manner whatever.
(2) Considering a person's credit report or credit score in determining a premium, policy fee, or rate charged for, in setting the coverage provided by, benefits payable under, or other terms and conditions of, or in refusing to issue, canceling, or refusing to renew, insurance.
For purposes of division (M)(2) of this section, "credit score" means a numerical value or categorization derived from a statistical tool or modeling system to predict the likelihood of certain credit behaviors, including default.
(N) Refusing to make available disability income insurance
solely because the applicant's principal occupation is that of
managing a household.
(O) Refusing, when offering maternity benefits under any
individual or group sickness and accident insurance policy, to
make maternity benefits available to the policyholder for the
individual or individuals to be covered under any comparable
policy to be issued for delivery in this state, including family
members if the policy otherwise provides coverage for family
members. Nothing in this division shall be construed to prohibit
an insurer from imposing a reasonable waiting period for such
benefits under an individual sickness
and accident insurance policy
issued to an individual who is not a federally eligible individual or a
nonemployer-related group sickness and accident
insurance policy, but in no
event shall such waiting period exceed two hundred seventy days.
For purposes of division
(O) of this section, "federally
eligible individual" means an eligible individual as defined in
(P) Using, or permitting to be used, a pattern settlement
as the basis of any offer of settlement. As used in this
division, "pattern settlement" means a method by which liability
is routinely imputed to a claimant without an investigation of
the particular occurrence upon which the claim is based and by
using a predetermined formula for the assignment of liability
arising out of occurrences of a similar nature. Nothing in this
division shall be construed to prohibit an insurer from
determining a claimant's liability by applying formulas or
guidelines to the facts and circumstances disclosed by the
insurer's investigation of the particular occurrence upon which a
claim is based.
(Q) Refusing to insure, or refusing to continue to insure,
or limiting the amount, extent, or kind of life or sickness and
accident insurance or annuity coverage available to an
individual, or charging an individual a different rate for the
same coverage solely because of blindness or partial blindness.
With respect to all other conditions, including the underlying
cause of blindness or partial blindness, persons who are blind or
partially blind shall be subject to the same standards of sound
actuarial principles or actual or reasonably anticipated
actuarial experience as are sighted persons. Refusal to insure
includes, but is not limited to, denial by an insurer of
disability insurance coverage on the grounds that the policy
defines "disability" as being presumed in the event that the
eyesight of the insured is lost. However, an insurer may exclude
from coverage disabilities consisting solely of blindness or
partial blindness when such conditions existed at the time the
policy was issued. To the extent that the provisions of this
division may appear to conflict with any provision of section
3999.16 of the Revised Code, this division applies.
(R)(1) Directly or indirectly offering to sell, selling,
or delivering, issuing for delivery, renewing, or using or
otherwise marketing any policy of insurance or insurance product
in connection with or in any way related to the grant of a
student loan guaranteed in whole or in part by an agency or
commission of this state or the United States, except insurance
that is required under federal or state law as a condition for
obtaining such a loan and the premium for which is included in
the fees and charges applicable to the loan; or, in the case of
an insurer or insurance agent, knowingly permitting any lender
making such loans to engage in such acts or practices in
connection with the insurer's or agent's insurance business.
(2) Except in the case of a violation of division (G) of
this section, division (R)(1) of this section does not apply to
either of the following:
(a) Acts or practices of an insurer, its agents,
representatives, or employees in connection with the grant of a
guaranteed student loan to its insured or the insured's spouse or
dependent children where such acts or practices take place more
than ninety days after the effective date of the insurance;
(b) Acts or practices of an insurer, its agents,
representatives, or employees in connection with the
solicitation, processing, or issuance of an insurance policy or
product covering the student loan borrower or the borrower's
dependent children, where such acts or practices take place more
than one hundred eighty days after the date on which the borrower
is notified that the student loan was approved.
(S) Denying coverage, under any health insurance or health
care policy, contract, or plan providing family coverage, to any
natural or adopted child of the named insured or subscriber
solely on the basis that the child does not reside in the
household of the named insured or subscriber.
(T)(1) Using any underwriting standard or engaging in any other act or
practice that, directly or indirectly, due solely to any health status-related
factor in relation to one or more individuals, does either of the following:
(a) Terminates or fails to renew an existing individual policy, contract, or
plan of health benefits, or a health benefit plan issued to an employer, for
which an individual would otherwise be eligible;
(b) With respect to a health benefit plan issued to an employer,
excludes or causes the exclusion of an individual from coverage under an
existing employer-provided policy, contract, or plan of health benefits.
(2) The superintendent of insurance may adopt rules in accordance with
Chapter 119. of the Revised Code for purposes of implementing division (T)(1)
of this section.
(3) For purposes of division (T)(1) of this
section, "health status-related factor" means any of the
(b) Medical condition, including both physical
and mental illnesses;
(d) Receipt of health care;
(g) Evidence of insurability, including
conditions arising out of acts of domestic violence;
(U) With respect to a health benefit plan issued to a small employer, as
those terms are defined in section 3924.01 of the Revised Code, negligently or
willfully placing coverage for adverse risks with a certain carrier, as
defined in section 3924.01 of the Revised Code.
(V) Using any program, scheme, device, or other unfair act
or practice that, directly or indirectly, causes or results in
the placing of coverage for adverse risks with another carrier,
as defined in section 3924.01 of the Revised Code.
(W) Failing to comply with section 3923.23, 3923.231,
3923.232, 3923.233, or 3923.234 of the Revised Code by engaging
in any unfair, discriminatory reimbursement practice.
(X) Intentionally establishing an unfair premium for, or
misrepresenting the cost of, any insurance policy financed under
a premium finance agreement of an insurance premium finance
(Y)(1)(a) Limiting coverage under, refusing to issue, canceling,
or refusing to renew, any individual policy or contract of life
insurance, or limiting coverage under or refusing to issue any individual
policy or contract of health insurance, for the reason that the insured or
applicant for insurance is or has
been a victim of domestic violence;
(b) Adding a surcharge or rating factor to a premium of any
individual policy or contract of life or health insurance for the reason that
the insured or applicant for insurance is or has been a victim of domestic
(c) Denying coverage under, or limiting coverage under, any policy or
contract of life or health insurance, for the reason that a claim under the
policy or contract arises from an incident of domestic violence;
(d) Inquiring, directly or indirectly, of an insured under, or of an
applicant for, a policy or contract of life or health insurance, as to whether
the insured or applicant is or has been a victim of domestic violence,
or inquiring as to whether the insured or applicant has sought shelter or
protection from domestic violence or has sought medical or psychological
treatment as a victim of domestic violence.
(2) Nothing in division (Y)(1) of this section shall be construed to
prohibit an insurer from inquiring as to, or from underwriting or rating a
risk on the basis of, a person's physical or mental condition, even if the
condition has been caused by domestic violence, provided that all of the
(a) The insurer routinely considers the condition in underwriting or
in rating risks, and does so in the same manner for a victim of domestic
violence as for an insured or applicant who is not a victim of domestic
(b) The insurer does not refuse to issue any policy or contract of life or
health insurance or cancel or refuse to
renew any policy or contract of life insurance, solely on the basis of the
condition, except where such refusal to issue, cancellation, or refusal
to renew is based on sound actuarial principles or is related to actual or
reasonably anticipated experience;
(c) The insurer does not consider a person's status as being or as
having been a victim of domestic violence, in itself, to be a physical or
(d) The underwriting or rating of a risk on the basis of the
is not used to evade the intent of division (Y)(1) of this section,
of any other provision of the Revised Code.
(3)(a) Nothing in division (Y)(1) of this section shall
be construed to
prohibit an insurer from refusing to issue a policy or contract of life
insurance insuring the life of a person who is or has been a victim of
domestic violence if the person who committed the act of domestic violence is
the applicant for the insurance or would be the owner of the insurance policy
(b) Nothing in division (Y)(2) of this section
shall be construed to permit an insurer to cancel or refuse to
renew any policy or contract of health insurance in violation of
the "Health Insurance Portability and
Accountability Act of 1996," 110 Stat.
1955, 42 U.S.C.A.
300gg-41(b), as amended, or in a manner that
violates or is inconsistent with any provision of the
Revised Code that implements the "Health
Insurance Portability and Accountability
Act of 1996."
(4) An insurer is immune from any civil or
criminal liability that otherwise might be incurred or imposed as a result of
any action taken by the insurer to comply with division
(Y) of this section.
(5) As used in division (Y) of this section,
violence" means any of the following acts:
(a) Knowingly causing or attempting to cause physical harm to a
or household member;
(b) Recklessly causing serious physical harm to a family or
(c) Knowingly causing, by threat of force, a family or household
member to believe that the person will cause imminent physical harm to the
family or household member.
For the purpose of division (Y)(5) of this
"family or household member" has the same meaning as in section 2919.25 of
the Revised Code.
Nothing in division (Y)(5)
of this section shall be
construed to require, as a condition to the application of division
(Y) of this section, that
the act described in division (Y)(5) of this section be the basis of
With respect to private passenger automobile insurance, no
insurer shall charge different premium rates to persons residing
within the limits of any municipal corporation based solely on
the location of the residence of the insured within those limits.
The enumeration in sections 3901.19 to 3901.26 of the
Revised Code of specific unfair or deceptive acts or practices in
the business of insurance is not exclusive or restrictive or
intended to limit the powers of the superintendent of insurance
to adopt rules to implement this section, or to take action under
other sections of the Revised Code.
This section does not prohibit the sale of shares of any
investment company registered under the "Investment Company Act
of 1940," 54 Stat. 789, 15 U.S.C.A. 80a-1, as amended, or any
policies, annuities, or other contracts described in section
3907.15 of the Revised Code.
As used in this section, "estimate," "statement,"
"representation," "misrepresentation," "advertisement," or
"announcement" includes oral or written occurrences.
Section 2. That existing section 3901.21 of the Revised Code is hereby repealed.