MISSISSIPPI LEGISLATURE

2000 Regular Session

To: Insurance

By: Senator(s) Blackmon

AN ACT TO PROHIBIT UNFAIR DISCRIMINATION AGAINST SUBJECTS OF ABUSE IN PROPERTY AND CASUALTY INSURANCE; TO DEFINE CERTAIN TERMS; TO PRESCRIBE UNFAIRLY DISCRIMINATORY ACTS RELATING TO PROPERTY AND CASUALTY INSURANCE; TO REQUIRE JUSTIFICATION OF ADVERSE INSURANCE DECISIONS WHICH AFFECT AN APPLICANT OR INSURED ON THE BASIS OF CLAIM OR OTHER UNDERWRITING INFORMATION THAT THE INSURER KNOWS OR HAS REASON TO KNOW IS ABUSE-RELATED; TO REQUIRE INSURERS TO DEVELOP AND ADHERE TO PROTOCOLS FOR SUBJECTS OF ABUSE; TO AUTHORIZE THE COMMISSIONER OF INSURANCE TO ENFORCE THE PROVISIONS OF THIS ACT; AND FOR RELATED PURPOSES.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MISSISSIPPI:

SECTION 1. Purpose.

The purpose of this act is to prohibit unfair discrimination by property and casualty insurers and insurance professionals on the basis of abuse status. Nothing in this act shall be construed to create or imply a private cause of action for a violation of this act.

SECTION 2. Scope.

This act applies to all property and casualty insurers and insurance professionals involved in issuing or renewing in this state a policy of property and casualty insurance.

SECTION 3. Definitions.

As used in this act, unless the context clearly indicates otherwise:

(a) "Abuse" means the occurrence of one or more of the following acts by a current or former family member, household member, intimate partner or caretaker:

(i) Attempting to cause or intentionally, knowingly or recklessly causing another person bodily injury, physical harm, severe emotional distress, psychological trauma, rape, sexual assault or involuntary sexual intercourse;

(ii) Knowingly engaging in a course of conduct or

repeatedly committing acts toward another person including following the person without proper authority, under circumstances that place the person in reasonable fear of bodily injury or physical harm;

(iii) Subjecting another person to false imprisonment; or

(iv) Attempting to cause or intentionally, knowingly, or recklessly causing damage to property so as to intimidate or attempt to control the behavior of another person.

(b) "Abuse-related claim" means a claim under a property and casualty policy for a loss resulting from an act of abuse.

(c) "Abuse status" means the fact or perception that a natural person is, has been, or may be a subject of abuse, irrespective of whether the natural person has incurred abuse-related claims.

(d) "Commissioner" means the Commissioner of Insurance of the State of Mississippi.

(e) "Confidential abuse information" means information about acts of abuse or abuse status of a subject of abuse, the address and telephone number (home and work) of a subject of abuse or the status of an applicant or insured as a family member, employer or associate of, or a person in a relationship with, a subject of abuse.

(f) "Insurance professional" means an agent, broker, adjuster or third party administrator as defined in the insurance laws of this state.

(g) "Insured" means the party named on a policy or certificate as the individual with legal rights to the benefits provided by such policy.

(h) "Insurer" means a person or other entity engaged in the business of property and casualty insurance in this state.

(i) "Policy" means a contract of insurance, including endorsements, riders or binders issued, proposed for issuance, or intended for issuance by an insurer or insurance professional.

(j) "Subject of abuse" means a natural person against whom an act of abuse has been directed; who has current or prior injuries, illnesses or disorders that resulted from abuse; or who seeks, may have sought or had reason to seek medical or psychological treatment for abuse; or protection, court-ordered protection or shelter from abuse.

SECTION 4. Unfairly Discriminatory Acts Relating to Property and Casualty Insurance.

(1) It is unfairly discriminatory to deny, refuse to issue, renew or reissue; to cancel or otherwise terminate; restrict or exclude coverage on or to add a premium differential to a property and casualty insurance policy on the basis of the applicant's or insured's abuse status.

(2) (a) It is unfairly discriminatory to:

(i) Exclude or limit payment for a covered loss or deny a covered claim incurred as a result of abuse by a person other than a co-insured; or

(ii) Fail to pay losses arising out of abuse to an innocent first party claimant to the extent of such claimants' legal interest in the covered property if the loss is caused by the intentional act of an insured, or using other exclusions or limitations on coverage which the commissioner has determined unreasonably restrict the ability of subjects of abuse to be indemnified for such losses.

(b) This section shall not require payment in excess of the loss or policy limits.

(c) Nothing in this act shall be construed to prohibit an insurer or insurance professional from applying reasonable standards of proof to claims under this section.

(3) When the insurer or insurance professional has information in its possession that clearly indicates that the insured, applicant or claimant is a subject of abuse, it is unfairly discriminatory, by a person employed by or contracting with an insurer, to disclose or transfer confidential abuse information, as defined in this act, for any purpose or to any person, except:

(a) To the subject of abuse or an individual specifically designated in writing by the subject of abuse;

(b) When ordered by the commissioner or a court of competent jurisdiction or otherwise required by law;

(c) When necessary for a valid business purpose to transfer information that includes confidential abuse information that cannot reasonably be segregated without undue hardship, confidential abuse information may be disclosed only if the recipient has executed a written agreement to be bound by the prohibitions of this act in all respects and to be subject to the enforcement of this act by the courts of this state for the benefit of the applicant or the insured, and only to the following persons:

(i) A reinsurer that seeks to indemnify or indemnifies all or any part of a policy covering a subject of abuse and that cannot underwrite or satisfy its obligations under the reinsurance agreement without that disclosure;

(ii) A party to a proposed or consummated sale, transfer, merger or consolidation of all or part of the business of the insurer or insurance professional;

(iii) Medical or claims personnel contracting with the insurer or insurance professional, only where necessary to process an application or perform the insurer's or insurance professional's duties under the policy or to protect the safety or privacy of a subject of abuse (also includes parent or affiliate companies of the insurer or insurance professional that have service agreements with the insurer or insurance professional); or

(iv) With respect to address and telephone number, to entities with whom the insurer transacts business when the business cannot be transacted without the address and telephone number;

(d) To an attorney who needs the information to represent the insurer or insurance professional effectively, provided the insurer or insurance professional notifies the attorney of its obligations under this act and requests that the attorney exercise due diligence to protect the confidential abuse information consistent with the attorney's obligation to represent the insurer or insurance professional; or

(e) To any other entities deemed appropriate by the commissioner.

(4) It is unfairly discriminatory to request information relating to acts of abuse or an applicant's or insured's abuse status, or to make use of that information, however obtained, except for the limited purposes of complying with legal obligations or verifying a person's claim to be a subject of abuse.

(5) Subsection (3) does not preclude a subject of abuse from obtaining his or her insurance records.

(6) Subsection (4) does not prohibit a property and casualty insurer from asking an applicant or insured about a property and casualty claim, even if the claim is abuse-related, or from using information thereby obtained in evaluating and carrying out its rights and duties under the policy, to the extent otherwise permitted under this act and other applicable law.

SECTION 5. Justification of Adverse Insurance Decisions.

An insurer or insurance professional that takes an action not prohibited by Section 4 of this act that adversely affects an applicant or insured on the basis of claim or other underwriting information that the insurer or insurance professional knows or has reason to know is abuse-related shall explain the reason for its action to the applicant or insured in writing and shall be able to demonstrate that its action, and any applicable policy provision:

(a) Does not have the purpose of treating abuse status as an underwriting criterion; and

(b) Is otherwise permissible by law and applies in the same manner and to the same extent to all applicants and insureds with a similar claim or claims history without regard to whether the claims are abuse-related.

SECTION 6. Insurance Protocols for Subjects of Abuse.

Insurers shall develop and adhere to written policies specifying procedures to be followed by employees and by insurance professionals they contract with, for the purpose of protecting the safety and privacy of a subject of abuse and shall otherwise implement the provisions of this act when taking an application, investigating a claim, pursuing subrogation or taking any other action relating to a policy or claim involving a subject of abuse. Insurers shall distribute their written policies to employees and insurance professionals.

SECTION 7. Enforcement.

The commissioner shall conduct a reasonable investigation based on a written and signed complaint received by the commissioner and issue a prompt determination as to whether a violation of this act may have occurred. If the commissioner finds from the investigation that a violation of this act may have occurred, the commissioner shall promptly begin an adjudicatory proceeding. The commissioner may address a violation through means appropriate to the nature and extent of the violation, which may include suspension or revocation of certificates of authority or licenses, imposition of civil penalties, issuance of cease and desist orders, injunctive relief, a requirement for restitution, referral to prosecutorial authorities or any combination of these. The powers and duties set forth in this section are in addition to all other authority of the commissioner.

SECTION 8. This act is effective July 1, 2000, and applies to all actions taken on or after the effective date, except where otherwise explicitly stated. Nothing in this act shall require an insurer or insurance professional to conduct a comprehensive search of its contract files existing on the effective date solely to determine which applicants or insureds are subjects of abuse.