Consumer Report Disclosures
All states except TX and WV: The National General Group insurance companies to which Direct Auto Insurance is appointed may obtain and review your current consumer reports, including your driver history report, credit report or an insurance score based on the information contained in that credit report, or other personal information from third parties. We may use this information to determine your renewal premium. We may use a third party to help with the development of your insurance score. The information from consumer reports may be disclosed to affiliated or unaffiliated third parties without your prior permission if permitted or required by law. Upon your written request or if adverse action was taken based on a consumer report, we will inform you and provide the name and address of the consumer reporting agency that furnished the report. You may also request reconsideration based on correction of confirmed errors. Where permitted by law, we may use subsequent consumer reports when updating and renewing your insurance with us. We will furnish a more detailed explanation of our information practices upon your request. If you object to us obtaining your consumer reports, we may choose not to insure you.
For Texas: USE OF CREDIT INFORMATION DISCLOSURE
The National General Group insurance companies , including Integon Indemnity Corporation and Direct General Insurance Company as well as Home State County Mutual Insurance Company to which Direct Auto Insurance is appointed will obtain and use credit information on its applicants and insureds as a part of the insurance credit scoring process.
If you have questions regarding this disclosure, contact the insurer at P.O. Box 3199, Winston-Salem, NC 27102-3199 or toll-free at 1-877-Go-Direct. For information or other questions, contact the Texas Department of Insurance at 1-800-578-4677 or P.O. Box 149104, MC 104-PC, Austin, Texas 78714
Section 559.053, of the Texas Insurance Code requires an insurer or its agents to disclose to its customers whether credit information will be obtained on the applicant or insured or on any other member(s) of the applicant's or insured's household and used as part of the insurance credit scoring process.
If credit information is obtained or used on the applicant or insured, or on any member of the applicant's or insured's household, the insurer shall disclose to the applicant the name of each person on whom credit information was obtained or used and how each person's credit information was used to underwrite or rate the policy. An insurer may provide this information with this disclosure or in a separate notice.
Adverse effect means an action taken by an insurer in connection with the underwriting of insurance for a consumer that results in the denial of coverage, the cancellation or nonrenewal of coverage, or the offer to and acceptance by a consumer of a policy form, premium rate, or deductible other than the policy form, premium rate, or deductible for which the consumer specifically applied.
Credit information is any credit related information derived from a credit report itself, or provided in an application for personal insurance. The term does not include information that is not credit-related, regardless of whether the information is contained in a credit report or in an application for insurance coverage or is used to compute a credit score.
Credit score or insurance score is a number or rating derived from a mathematical formula, computer application, model, or other process that is based on credit information and used to predict the future insurance loss exposure of a consumer.
SUMMARY OF CONSUMER PROTECTIONS CONTAINED IN CHAPTER 559
PROHIBITED USE OF CREDIT INFORMATION. An insurer may not:
- use a credit score that is computed using factors that constitute unfair discrimination;
- deny, cancel, or nonrenew a policy of personal insurance solely on the basis of credit information without consideration of any other applicable underwriting factor independent of credit information; or
- take an action that results in an adverse effect against a consumer because the consumer does not have a credit card account without consideration of any other applicable factor independent of credit information.
An insurer may not consider an absence of credit information or an inability to determine credit information for an applicant for insurance coverage or insured as a factor in underwriting or rating an insurance policy unless the insurer:
- has statistical, actuarial, or reasonable underwriting information that: (A) is reasonably related to actual or anticipated loss experience; and (B) shows that the absence of credit information could result in actual or anticipated loss differences ;
- treats the consumer as if the applicant for insurance coverage or insured had neutral credit information, as defined by the insurer; or
- excludes the use of credit information as a factor in underwriting and uses only other underwriting criteria .
NEGATIVE FACTORS. An insurer may not use any of the following as a negative factor in any credit scoring methodology or in reviewing credit information to underwrite or rate a policy of personal insurance :
- a credit inquiry that is not initiated by the consumer;
- an inquiry relating to insurance coverage, if so identified on a consumer's credit report; or
- a collection account with a medical industry code, if so identified on the consumer's credit report.
Multiple lender inquiries made within 30 days of a prior inquiry, if coded by the consumer reporting agency on the consumer's credit report as from the home mortgage or motor vehicle lending industry, shall be considered by an insurer as only one inquiry.
EFFECT OF EXTRAORDINARY EVENTS. An insurer shall, on written request from an applicant for insurance coverage or an insured, 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. In such a case, the insurer may consider only credit information not affected by the event or shall assign a neutral credit score.
An insurer may require reasonable written and independently verifiable documentation of the event and the effect of the event on the person's credit before granting an exception. An insurer is not required to consider repeated events or events the insurer reconsidered previously as an extraordinary event.
An insurer may also consider granting an exception to an applicant for insurance coverage or an insured for an extraordinary event not listed in this section. An insurer is not out of compliance with any law or rule relating to underwriting, rating, or rate filing as a result of granting an exception under this article.
NOTICE OF ACTION RESULTING IN ADVERSE EFFECT. If an insurer takes an action resulting in an adverse effect with respect to an applicant for insurance coverage or insured based in whole or in part on information contained in a credit report, the insurer must provide to the applicant or insured within 30 days certain information regarding how an applicant or insured may verify and dispute information contained in a credit report.
DISPUTE RESOLUTION; ERROR CORRECTION. If it is determined through the dispute resolution process established under Section 611(a)(5), Fair Credit Reporting Act (15 U.S.C. Section 1681i), as amended, that the credit information of a current insured was inaccurate or incomplete or could not be verified and the insurer receives notice of that determination from the consumer reporting agency or from the insured, the insurer shall re-underwrite and re-rate the insured not later than the 30th day after the date of receipt of the notice.
After re-underwriting or re-rating the insured, the insurer shall make any adjustments necessary within 30 days, consistent with the insurer's underwriting and rating guidelines. If an insurer determines that the insured has overpaid premium, the insurer shall credit the amount of overpayment. The insurer shall compute the overpayment back to the shorter of the last 12 months of coverage; or the actual policy period.
For West Virginia: Your credit information is used by the National General Group insurance companies, including National General Assurance Company (hereinafter “we”) to produce an insurance score. This insurance score has an effect on the premium that you pay for your insurance. We are required by the Insurance Commissioner to recheck your credit information no less than once every 36 months for changes. You have the option to request that we recheck your insurance score more frequently than once every 36 months, but you can only make this request once during any twelve-month period. If there has been a change in your insurance score, we shall re-underwrite and re-rate the policy based upon the current credit report or insurance score. The change in your insurance score may result in an increase or a decrease in the premium that you pay for your insurance. Any changes in your premium will take place upon renewal if your request is made at least 45 days before your renewal. If the request is made less than 45 days before your renewal date, the insurer shall re-underwrite and re-rate the policy for the following renewal.