Summary#
A-11725 would amend New York’s Insurance Law by adding a rule for homeowners’ insurance. Its stated goal is to stop insurers from using an applicant’s or insured person’s credit history in specified insurance decisions. The bill has been introduced and referred to the Insurance Committee; it is not law.
- Insurers could not refuse to underwrite, cancel, or refuse to renew homeowners’ insurance based wholly or partly on credit history.
- Insurers could not use credit history to rate a risk, including to add or remove a discount or surcharge, assign a tier, or place someone with an affiliated insurer.
- Insurers could not require a particular payment plan based on credit history.
- These prohibitions would also apply when a person has no credit history or the insurer cannot determine their credit history.
- The bill says it would take effect immediately if enacted.
What it means for you#
- Homeowners’ insurance applicants and insured people: An insurer could not use your credit history, or lack of credit history, for the decisions and pricing practices listed above.
- Insurers: They would have to stop using credit history for those purposes. The bill does not bar decisions based on factors other than credit history.
- People with other types of insurance: The bill addresses homeowners’ insurance; it does not directly change rules for other insurance.
- The supplied material does not include the existing Insurance Law provisions on credit use, so I could not verify what current law allows.
Money#
No cost estimate is provided; no publicly available information on implementation costs is included in the supplied material.
- The bill does not set premiums, create a fee or benefit, or provide funding.
- It does not give an estimate of insurers’ compliance costs or any effect on premiums.
What is unclear#
- The bill does not define “credit history.”
- It does not set out enforcement powers, penalties, complaint steps, or an appeal process for people who believe an insurer broke the rule.
- The supplied material does not explain how the new rule would interact with other Insurance Law provisions or existing insurance practices.
- The bill does not explain whether or how insurers would have to show that a decision was not based on credit history.
Case for#
- A possible argument for the bill is that a person’s credit history would no longer affect whether they can get or keep homeowners’ insurance.
- The bill covers more than outright denial: it also bars credit-based pricing, tier placement, use of an affiliated insurer, and required payment plans.
- Including people with no credit history or an undetermined history prevents insurers from treating that absence as a basis for the listed decisions.
Case against#
- One concern is that the bill would bar credit history as a factor in all the listed decisions, even when it is only one part of the decision.
- It would also bar credit-based discounts, not just credit-based surcharges or refusals. That could limit insurers’ pricing choices.
- The bill does not specify how the rule would be enforced or how disputes would be resolved.