Recent reports relating to the theft of thousands of personal records, including credit reports from data collection company, ChoicePoint, Inc. have prompted the Texas Department of Insurance (Department) to issue this bulletin. Since personal information on more than 11,000 Texans may have been disclosed, it is important to remind insurers of their obligations pursuant to Section 5, Article 21.49-2U.
Section 5 (a), requires that an insurer provide reasonable exceptions to the insurer's rates, rating classifications, or underwriting rules for a consumer whose credit information has been directly influenced by a catastrophic illness or injury, by the death of a spouse, child, or parent, by temporary loss of employment, by divorce, or by identity theft upon written request from an applicant for insurance coverage or an insured. In such a case, the insurer may consider only credit information not affected by the event or shall assign a neutral credit score.
The Department has identified the following as examples of reasonable exceptions for individuals affected by identity theft: accepting verbal requests for exceptions in lieu of written requests; giving presumptive weight to information provided by ChoicePoint, Inc. regarding persons subject to identity theft; initiating contact with ChoicePoint, Inc. representatives on the applicant´s or policyholder´s behalf; and, if reasonable documentation under 21.49-2U, Section 5(b) is requested, establishing flexible and practical processes that give presumptive weight to applicants and policyholders identified by ChoicePoint, Inc. as victims of identity theft, particularly when identifying unauthorized activity that occurred after the general dates or month in which the identity theft occurred.
Article 21.49-2U applies to personal insurance, which includes personal automobile, residential property, residential fire and allied lines insurance policies; or a noncommercial insurance policy covering a boat, personal watercraft, snowmobile, or recreational vehicle.
Questions regarding this bulletin may be directed to Grover Corum, Personal Lines Division, at 512--322-2266 Grover.Corum@tdi.state.tx.us.
__________________________________José Montemayor
Commissioner of Insurance