Carson City, NV February 23, 2023
The Nevada Supreme Court upheld the Division's regulation prohibiting insurance companies from using adverse
credit information to increase premiums in personal lines of insurance until
May 20, 2024. Credit-based insurance scores, which use credit information to
price insurance, were negatively affected for many people when the government
imposed the lockdown during the pandemic. This resulted in premium increases
for some, which the Division of Insurance determined created an unfairly
discriminatory result. The Court found that “[t]he Division acted
within the province of its authority when it found that using consumer credit
scores against insureds during the pandemic and its aftermath would result in
unfair actuarial discrimination.”
“The
Court’s decision provides a helpful analysis of both the Division’s authority
to promulgate regulations and how the term ‘discrimination’ may be fairly read
in this matter,” said Interim Commissioner Nick Stosic. “The intent of this
regulation was to protect those consumers who were already severely affected by
the pandemic, without unfairly burdening the insurance companies,” continued
Stosic.
The Division is currently evaluating the number of carriers
impacted by this decision and will be providing guidance to carriers on how to
comply with this ruling. Regulation
R087-20 was approved by the Legislative Commission on December 28, 2020; and it
became effective when it was filed with the Secretary of State’s Office on
December 29, 2020. The full text of the approved Regulation R087-20 may be
found here: https://www.leg.state.nv.us/Register/2020Register/R087-20AP.pdf.
About the Nevada Division of Insurance
The State of Nevada Division of Insurance, a Division of
the Nevada Department of Business and Industry, protects the rights of Nevada
consumers and regulates Nevada’s $22 billion insurance industry. The Division
of Insurance has offices in Carson City and Las Vegas. For Fiscal Years 2021
and 2022, the Division investigated 5,062 consumer complaints, answered
approximately 25,000 inquiries, and recovered over $8 million on behalf of
consumers. For more information about the Division of Insurance, visit DOI.NV.GOV.
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