N.Y. Insurance Law § 2804: Initial notification

§ 2804. Initial notification. An insurer writing personal lines

insurance which uses credit information in underwriting or rating a

consumer, shall disclose such fact to the consumer. The insurer shall

provide the disclosure required under this section to any insured on new

and renewal policies.

(a) The disclosure must be provided in a separate written document,

which need not be provided in a separate mailing as another document as

long as it is provided on a separate piece of paper, except that for new

business it may be provided either in writing or in the same medium as

the application for insurance.

(b) The disclosure must, in clear and specific language, comply with

the following:

(1) inform the consumer that it may obtain credit information in

connection with the application or renewal;

(2) give an explanation of insurance scoring;

(3) list typical items relative to a consumer's credit history that

could affect such score; and

(4) provide the name of the consumer reporting agency supplying the

credit data used in determining the score.

(c) Use of one of the following example disclosure statements

constitutes compliance with this section:

(1) "In connection with this insurance, we may review your credit

report or obtain or use a credit-based insurance score based on

information contained in that report. An insurance score uses

information from your credit report to help predict how often you are

likely to file claims and how expensive those claims will be. Typical

items from a credit report that could affect a score include, but are

not limited to, the following: payment history, number of revolving

accounts, number of new accounts, the presence of collection accounts,

bankruptcies and foreclosures. The information used to develop the

insurance score comes from (insert name.)"; or

(2) Use of the following example disclosure statement for renewal

business constitutes compliance with this section: "In connection with

this insurance, we previously used a credit report or obtained or used a

credit-based insurance score based on information contained in that

report. We may obtain or use credit information again provided, however,

that upon renewal such information may only be used to reduce premiums.

An insurance score uses information from your credit report to help

predict how often you are likely to file claims and how expensive those

claims will be. Typical items from a credit report that could affect a

score include, but are not limited to, the following: payment history,

number of revolving accounts, number of new accounts, the presence of

collection accounts, bankruptcies and foreclosures. The information used

to develop the insurance score comes from (insert name.)".

(d) If a new business application is taken over the telephone, an oral

disclosure may be provided by one of the following approaches:

(1) As described in subsections (a) through (c) of this section; or

(2) (A) By first disclosing the fact that the insurer may obtain

credit information in connection with such application, as indicated in

paragraph one of subsection (b) of this section. Use of the following

example disclosure constitutes compliance with this provision: "In

connection with this application for insurance, we may review your

credit report or obtain or use a credit-based insurance score based on

the information contained in that credit report."; and

(B) If a policy is issued, by supplying the information required under

paragraphs two, three and four of subsection (b) of this section. The

disclosure must be provided in a separate written document, which need

not be provided in a separate mailing as another document as long as it

is provided on a separate piece of paper. Use of the following example

disclosure constitutes compliance with this provision: "In connection

with this insurance, we reviewed your credit report or obtained or used

a credit-based insurance score based on information contained in that

report. An insurance score uses information from your credit report to

help predict how often you are likely to file claims and how expensive

those claims will be. Typical items from a credit report that could

affect a score include, but are not limited to, the following: payment

history, number of revolving accounts, number of new accounts, the

presence of collection accounts, bankruptcies and foreclosures. The

information used to develop the insurance score comes from (insert

name.)".