Bill Text: OH SB123 | 2009-2010 | 128th General Assembly | Introduced

---

Bill Title: To allow insurers to charge different rates for private passenger automobile insurance based upon the location of the residence of the insured within the limits of a municipal corporation.

Spectrum: Partisan Bill (Republican 4-0)

Status: (Introduced - Dead) 2009-04-30 - To Insurance, Commerce, & Labor [SB123 Detail]

Download: Ohio-2009-SB123-Introduced.html

---

As Introduced

128th General Assembly Regular Session 2009-2010

S. B. No. 123

Senator Goodman 

Cosponsors: Senators Schuler, Seitz, Schuring 

---

A BILL

To amend section 3901.21 of the Revised Code to allow

1

insurers to charge different rates for private

2

passenger automobile insurance based upon the

3

location of the residence of the insured within

4

the limits of a municipal corporation.

5

BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF OHIO:

Section 1. That section 3901.21 of the Revised Code be	6
amended to read as follows:	7

Sec. 3901.21.  The following are hereby defined as unfair and	8
deceptive acts or practices in the business of insurance:	9

(A) Making, issuing, circulating, or causing or permitting to	10
be made, issued, or circulated, or preparing with intent to so	11
use, any estimate, illustration, circular, or statement	12
misrepresenting the terms of any policy issued or to be issued or	13
the benefits or advantages promised thereby or the dividends or	14
share of the surplus to be received thereon, or making any false	15
or misleading statements as to the dividends or share of surplus	16
previously paid on similar policies, or making any misleading	17
representation or any misrepresentation as to the financial	18
condition of any insurer as shown by the last preceding verified	19
statement made by it to the insurance department of this state, or	20
as to the legal reserve system upon which any life insurer	21
operates, or using any name or title of any policy or class of	22
policies misrepresenting the true nature thereof, or making any	23
misrepresentation or incomplete comparison to any person for the	24
purpose of inducing or tending to induce such person to purchase,	25
amend, lapse, forfeit, change, or surrender insurance.	26

Any written statement concerning the premiums for a policy	27
which refers to the net cost after credit for an assumed dividend,	28
without an accurate written statement of the gross premiums, cash	29
values, and dividends based on the insurer's current dividend	30
scale, which are used to compute the net cost for such policy, and	31
a prominent warning that the rate of dividend is not guaranteed,	32
is a misrepresentation for the purposes of this division.	33

(B) Making, publishing, disseminating, circulating, or	34
placing before the public or causing, directly or indirectly, to	35
be made, published, disseminated, circulated, or placed before the	36
public, in a newspaper, magazine, or other publication, or in the	37
form of a notice, circular, pamphlet, letter, or poster, or over	38
any radio station, or in any other way, or preparing with intent	39
to so use, an advertisement, announcement, or statement containing	40
any assertion, representation, or statement, with respect to the	41
business of insurance or with respect to any person in the conduct	42
of the person's insurance business, which is untrue, deceptive, or	43
misleading.	44

(C) Making, publishing, disseminating, or circulating,	45
directly or indirectly, or aiding, abetting, or encouraging the	46
making, publishing, disseminating, or circulating, or preparing	47
with intent to so use, any statement, pamphlet, circular, article,	48
or literature, which is false as to the financial condition of an	49
insurer and which is calculated to injure any person engaged in	50
the business of insurance.	51

(D) Filing with any supervisory or other public official, or	52
making, publishing, disseminating, circulating, or delivering to	53
any person, or placing before the public, or causing directly or	54
indirectly to be made, published, disseminated, circulated,	55
delivered to any person, or placed before the public, any false	56
statement of financial condition of an insurer.	57

Making any false entry in any book, report, or statement of	58
any insurer with intent to deceive any agent or examiner lawfully	59
appointed to examine into its condition or into any of its	60
affairs, or any public official to whom such insurer is required	61
by law to report, or who has authority by law to examine into its	62
condition or into any of its affairs, or, with like intent,	63
willfully omitting to make a true entry of any material fact	64
pertaining to the business of such insurer in any book, report, or	65
statement of such insurer, or mutilating, destroying, suppressing,	66
withholding, or concealing any of its records.	67

(E) Issuing or delivering or permitting agents, officers, or	68
employees to issue or deliver agency company stock or other	69
capital stock or benefit certificates or shares in any common-law	70
corporation or securities or any special or advisory board	71
contracts or other contracts of any kind promising returns and	72
profits as an inducement to insurance.	73

(F) Making or permitting any unfair discrimination among	74
individuals of the same class and equal expectation of life in the	75
rates charged for any contract of life insurance or of life	76
annuity or in the dividends or other benefits payable thereon, or	77
in any other of the terms and conditions of such contract.	78

(G)(1) Except as otherwise expressly provided by law,	79
knowingly permitting or offering to make or making any contract of	80
life insurance, life annuity or accident and health insurance, or	81
agreement as to such contract other than as plainly expressed in	82
the contract issued thereon, or paying or allowing, or giving or	83
offering to pay, allow, or give, directly or indirectly, as	84
inducement to such insurance, or annuity, any rebate of premiums	85
payable on the contract, or any special favor or advantage in the	86
dividends or other benefits thereon, or any valuable consideration	87
or inducement whatever not specified in the contract; or giving,	88
or selling, or purchasing, or offering to give, sell, or purchase,	89
as inducement to such insurance or annuity or in connection	90
therewith, any stocks, bonds, or other securities, or other	91
obligations of any insurance company or other corporation,	92
association, or partnership, or any dividends or profits accrued	93
thereon, or anything of value whatsoever not specified in the	94
contract.	95

(2) Nothing in division (F) or division (G)(1) of this	96
section shall be construed as prohibiting any of the following	97
practices: (a) in the case of any contract of life insurance or	98
life annuity, paying bonuses to policyholders or otherwise abating	99
their premiums in whole or in part out of surplus accumulated from	100
nonparticipating insurance, provided that any such bonuses or	101
abatement of premiums shall be fair and equitable to policyholders	102
and for the best interests of the company and its policyholders;	103
(b) in the case of life insurance policies issued on the	104
industrial debit plan, making allowance to policyholders who have	105
continuously for a specified period made premium payments directly	106
to an office of the insurer in an amount which fairly represents	107
the saving in collection expenses; (c) readjustment of the rate of	108
premium for a group insurance policy based on the loss or expense	109
experience thereunder, at the end of the first or any subsequent	110
policy year of insurance thereunder, which may be made retroactive	111
only for such policy year.	112

(H) Making, issuing, circulating, or causing or permitting to	113
be made, issued, or circulated, or preparing with intent to so	114
use, any statement to the effect that a policy of life insurance	115
is, is the equivalent of, or represents shares of capital stock or	116
any rights or options to subscribe for or otherwise acquire any	117
such shares in the life insurance company issuing that policy or	118
any other company.	119

(I) Making, issuing, circulating, or causing or permitting to	120
be made, issued or circulated, or preparing with intent to so	121
issue, any statement to the effect that payments to a policyholder	122
of the principal amounts of a pure endowment are other than	123
payments of a specific benefit for which specific premiums have	124
been paid.	125

(J) Making, issuing, circulating, or causing or permitting to	126
be made, issued, or circulated, or preparing with intent to so	127
use, any statement to the effect that any insurance company was	128
required to change a policy form or related material to comply	129
with Title XXXIX of the Revised Code or any regulation of the	130
superintendent of insurance, for the purpose of inducing or	131
intending to induce any policyholder or prospective policyholder	132
to purchase, amend, lapse, forfeit, change, or surrender	133
insurance.	134

(K) Aiding or abetting another to violate this section.

135

(L) Refusing to issue any policy of insurance, or canceling	136
or declining to renew such policy because of the sex or marital	137
status of the applicant, prospective insured, insured, or	138
policyholder.	139

(M) Making or permitting any unfair discrimination between	140
individuals of the same class and of essentially the same hazard	141
in the amount of premium, policy fees, or rates charged for any	142
policy or contract of insurance, other than life insurance, or in	143
the benefits payable thereunder, or in underwriting standards and	144
practices or eligibility requirements, or in any of the terms or	145
conditions of such contract, or in any other manner whatever.	146

(N) Refusing to make available disability income insurance	147
solely because the applicant's principal occupation is that of	148
managing a household.	149

(O) Refusing, when offering maternity benefits under any	150
individual or group sickness and accident insurance policy, to	151
make maternity benefits available to the policyholder for the	152
individual or individuals to be covered under any comparable	153
policy to be issued for delivery in this state, including family	154
members if the policy otherwise provides coverage for family	155
members. Nothing in this division shall be construed to prohibit	156
an insurer from imposing a reasonable waiting period for such	157
benefits under an individual sickness and accident insurance	158
policy issued to an individual who is not a federally eligible	159
individual or a nonemployer-related group sickness and accident	160
insurance policy, but in no event shall such waiting period exceed	161
two hundred seventy days.	162

For purposes of division (O) of this section, "federally	163
eligible individual" means an eligible individual as defined in 45	164
C.F.R. 148.103.	165

(P) Using, or permitting to be used, a pattern settlement as	166
the basis of any offer of settlement. As used in this division,	167
"pattern settlement" means a method by which liability is	168
routinely imputed to a claimant without an investigation of the	169
particular occurrence upon which the claim is based and by using a	170
predetermined formula for the assignment of liability arising out	171
of occurrences of a similar nature. Nothing in this division shall	172
be construed to prohibit an insurer from determining a claimant's	173
liability by applying formulas or guidelines to the facts and	174
circumstances disclosed by the insurer's investigation of the	175
particular occurrence upon which a claim is based.	176

(Q) Refusing to insure, or refusing to continue to insure, or	177
limiting the amount, extent, or kind of life or sickness and	178
accident insurance or annuity coverage available to an individual,	179
or charging an individual a different rate for the same coverage	180
solely because of blindness or partial blindness. With respect to	181
all other conditions, including the underlying cause of blindness	182
or partial blindness, persons who are blind or partially blind	183
shall be subject to the same standards of sound actuarial	184
principles or actual or reasonably anticipated actuarial	185
experience as are sighted persons. Refusal to insure includes, but	186
is not limited to, denial by an insurer of disability insurance	187
coverage on the grounds that the policy defines "disability" as	188
being presumed in the event that the eyesight of the insured is	189
lost. However, an insurer may exclude from coverage disabilities	190
consisting solely of blindness or partial blindness when such	191
conditions existed at the time the policy was issued. To the	192
extent that the provisions of this division may appear to conflict	193
with any provision of section 3999.16 of the Revised Code, this	194
division applies.	195

(R)(1) Directly or indirectly offering to sell, selling, or	196
delivering, issuing for delivery, renewing, or using or otherwise	197
marketing any policy of insurance or insurance product in	198
connection with or in any way related to the grant of a student	199
loan guaranteed in whole or in part by an agency or commission of	200
this state or the United States, except insurance that is required	201
under federal or state law as a condition for obtaining such a	202
loan and the premium for which is included in the fees and charges	203
applicable to the loan; or, in the case of an insurer or insurance	204
agent, knowingly permitting any lender making such loans to engage	205
in such acts or practices in connection with the insurer's or	206
agent's insurance business.	207

(2) Except in the case of a violation of division (G) of this	208
section, division (R)(1) of this section does not apply to either	209
of the following:	210

(a) Acts or practices of an insurer, its agents,	211
representatives, or employees in connection with the grant of a	212
guaranteed student loan to its insured or the insured's spouse or	213
dependent children where such acts or practices take place more	214
than ninety days after the effective date of the insurance;	215

(b) Acts or practices of an insurer, its agents,	216
representatives, or employees in connection with the solicitation,	217
processing, or issuance of an insurance policy or product covering	218
the student loan borrower or the borrower's spouse or dependent	219
children, where such acts or practices take place more than one	220
hundred eighty days after the date on which the borrower is	221
notified that the student loan was approved.	222

(S) Denying coverage, under any health insurance or health	223
care policy, contract, or plan providing family coverage, to any	224
natural or adopted child of the named insured or subscriber solely	225
on the basis that the child does not reside in the household of	226
the named insured or subscriber.	227

(T)(1) Using any underwriting standard or engaging in any	228
other act or practice that, directly or indirectly, due solely to	229
any health status-related factor in relation to one or more	230
individuals, does either of the following:	231

(a) Terminates or fails to renew an existing individual	232
policy, contract, or plan of health benefits, or a health benefit	233
plan issued to an employer, for which an individual would	234
otherwise be eligible;	235

(b) With respect to a health benefit plan issued to an	236
employer, excludes or causes the exclusion of an individual from	237
coverage under an existing employer-provided policy, contract, or	238
plan of health benefits.	239

(2) The superintendent of insurance may adopt rules in	240
accordance with Chapter 119. of the Revised Code for purposes of	241
implementing division (T)(1) of this section.	242

(3) For purposes of division (T)(1) of this section, "health	243
status-related factor" means any of the following:	244

(a) Health status;

245

(b) Medical condition, including both physical and mental	246
illnesses;	247

(c) Claims experience;

248

(d) Receipt of health care;

249

(e) Medical history;

250

(f) Genetic information;

251

(g) Evidence of insurability, including conditions arising	252
out of acts of domestic violence;	253

(h) Disability.

254

(U) With respect to a health benefit plan issued to a small	255
employer, as those terms are defined in section 3924.01 of the	256
Revised Code, negligently or willfully placing coverage for	257
adverse risks with a certain carrier, as defined in section	258
3924.01 of the Revised Code.	259

(V) Using any program, scheme, device, or other unfair act or	260
practice that, directly or indirectly, causes or results in the	261
placing of coverage for adverse risks with another carrier, as	262
defined in section 3924.01 of the Revised Code.	263

(W) Failing to comply with section 3923.23, 3923.231,	264
3923.232, 3923.233, or 3923.234 of the Revised Code by engaging in	265
any unfair, discriminatory reimbursement practice.	266

(X) Intentionally establishing an unfair premium for, or	267
misrepresenting the cost of, any insurance policy financed under a	268
premium finance agreement of an insurance premium finance company.	269

(Y)(1)(a) Limiting coverage under, refusing to issue,	270
canceling, or refusing to renew, any individual policy or contract	271
of life insurance, or limiting coverage under or refusing to issue	272
any individual policy or contract of health insurance, for the	273
reason that the insured or applicant for insurance is or has been	274
a victim of domestic violence;	275

(b) Adding a surcharge or rating factor to a premium of any	276
individual policy or contract of life or health insurance for the	277
reason that the insured or applicant for insurance is or has been	278
a victim of domestic violence;	279

(c) Denying coverage under, or limiting coverage under, any	280
policy or contract of life or health insurance, for the reason	281
that a claim under the policy or contract arises from an incident	282
of domestic violence;	283

(d) Inquiring, directly or indirectly, of an insured under,	284
or of an applicant for, a policy or contract of life or health	285
insurance, as to whether the insured or applicant is or has been a	286
victim of domestic violence, or inquiring as to whether the	287
insured or applicant has sought shelter or protection from	288
domestic violence or has sought medical or psychological treatment	289
as a victim of domestic violence.	290

(2) Nothing in division (Y)(1) of this section shall be	291
construed to prohibit an insurer from inquiring as to, or from	292
underwriting or rating a risk on the basis of, a person's physical	293
or mental condition, even if the condition has been caused by	294
domestic violence, provided that all of the following apply:	295

(a) The insurer routinely considers the condition in	296
underwriting or in rating risks, and does so in the same manner	297
for a victim of domestic violence as for an insured or applicant	298
who is not a victim of domestic violence;	299

(b) The insurer does not refuse to issue any policy or	300
contract of life or health insurance or cancel or refuse to renew	301
any policy or contract of life insurance, solely on the basis of	302
the condition, except where such refusal to issue, cancellation,	303
or refusal to renew is based on sound actuarial principles or is	304
related to actual or reasonably anticipated experience;	305

(c) The insurer does not consider a person's status as being	306
or as having been a victim of domestic violence, in itself, to be	307
a physical or mental condition;	308

(d) The underwriting or rating of a risk on the basis of the	309
condition is not used to evade the intent of division (Y)(1) of	310
this section, or of any other provision of the Revised Code.	311

(3)(a) Nothing in division (Y)(1) of this section shall be	312
construed to prohibit an insurer from refusing to issue a policy	313
or contract of life insurance insuring the life of a person who is	314
or has been a victim of domestic violence if the person who	315
committed the act of domestic violence is the applicant for the	316
insurance or would be the owner of the insurance policy or	317
contract.	318

(b) Nothing in division (Y)(2) of this section shall be	319
construed to permit an insurer to cancel or refuse to renew any	320
policy or contract of health insurance in violation of the "Health	321
Insurance Portability and Accountability Act of 1996," 110 Stat.	322
1955, 42 U.S.C.A. 300gg-41(b), as amended, or in a manner that	323
violates or is inconsistent with any provision of the Revised Code	324
that implements the "Health Insurance Portability and	325
Accountability Act of 1996."	326

(4) An insurer is immune from any civil or criminal liability	327
that otherwise might be incurred or imposed as a result of any	328
action taken by the insurer to comply with division (Y) of this	329
section.	330

(5) As used in division (Y) of this section, "domestic	331
violence" means any of the following acts:	332

(a) Knowingly causing or attempting to cause physical harm to	333
a family or household member;	334

(b) Recklessly causing serious physical harm to a family or	335
household member;	336

(c) Knowingly causing, by threat of force, a family or	337
household member to believe that the person will cause imminent	338
physical harm to the family or household member.	339

For the purpose of division (Y)(5) of this section, "family	340
or household member" has the same meaning as in section 2919.25 of	341
the Revised Code.	342

Nothing in division (Y)(5) of this section shall be construed	343
to require, as a condition to the application of division (Y) of	344
this section, that the act described in division (Y)(5) of this	345
section be the basis of a criminal prosecution.	346

(Z) Disclosing a coroner's records by an insurer in violation	347
of section 313.10 of the Revised Code.	348

With respect to private passenger automobile insurance, no	349
insurer shall charge different premium rates to persons residing	350
within the limits of any municipal corporation based solely on the	351
location of the residence of the insured within those limits.	352

The enumeration in sections 3901.19 to 3901.26 of the Revised	353
Code of specific unfair or deceptive acts or practices in the	354
business of insurance is not exclusive or restrictive or intended	355
to limit the powers of the superintendent of insurance to adopt	356
rules to implement this section, or to take action under other	357
sections of the Revised Code.	358

This section does not prohibit the sale of shares of any	359
investment company registered under the "Investment Company Act of	360
1940," 54 Stat. 789, 15 U.S.C.A. 80a-1, as amended, or any	361
policies, annuities, or other contracts described in section	362
3907.15 of the Revised Code.	363

As used in this section, "estimate," "statement,"	364
"representation," "misrepresentation," "advertisement," or	365
"announcement" includes oral or written occurrences.	366

Section 2. That existing section 3901.21 of the Revised Code	367
is hereby repealed.	368