A bill for an act relating to an insurer’s use of credit information for a motor vehicle financial liability coverage policy.
Summary
HF2259 would prohibit insurers authorized to do business in Iowa from using a consumer’s credit information when underwriting or setting rates for a motor vehicle financial liability coverage policy. The bill defines that coverage by reference to Iowa’s motor vehicle liability insurance requirements and limits the prohibition to this type of personal auto liability policy.
The measure also makes a conforming change to the Code’s definition of “personal insurance,” while leaving intact existing Iowa rules that already restrict certain uses of credit information in insurance underwriting more generally. Under current law, insurers may use credit information for some personal insurance products but cannot rely on it in certain adverse-action situations or in ways that ignore other underwriting factors; HF2259 would carve out auto liability coverage from credit-based underwriting and rating altogether.
Impact
If enacted, HF2259 would amend Iowa Code section 515.103 to bar insurers from using credit history, credit scores, or related credit information to underwrite or rate motor vehicle financial liability coverage policies. This would directly affect auto insurers operating in Iowa and would remove credit-based pricing as a factor for personal automobile liability coverage, while not changing the broader framework for other personal insurance lines such as homeowners, farmowners, motorcycle, mobile home, boat, snowmobile, and recreational vehicle policies.
Sentiment
Based on the bill text and its early legislative status, the measure appears to be a consumer-protection proposal aimed at limiting the role of credit in auto insurance pricing. There is no recorded committee testimony or vote history in the provided materials, so no formal opposition or support is documented here. The bill was introduced and referred to the Commerce Committee, indicating it was at the beginning of the legislative process.
Contention
The main policy issue is whether insurers should be allowed to use credit information as a rating factor for auto liability coverage. Supporters would likely view the bill as reducing unfair pricing and protecting consumers whose credit does not reflect driving risk, while opponents would likely argue that credit-based underwriting is a useful actuarial tool that helps price risk more accurately. Because no committee discussion or votes are provided, specific lawmakers or stakeholder groups taking those positions are not identified in the record supplied.
A bill for an act relating to the penalty for a second or subsequent violation of motor vehicle financial liability coverage requirements.(See HF 918.)
A bill for an act relating to motor vehicle financial liability coverage, providing penalties, and including effective date provisions. (Formerly HSB 172.)