NU Online News Service, July 16, 3:43 p.m.EDT

The National Conference of Insurance Legislators has amended itsmodel credit scoring legislation to require that insurers give abreak to people hit by extraordinary events such as job loss andserious illness.

Under the change, carriers would have to provide an exemptiontaking into account unusual financial impacts from "extraordinarylife circumstances," particularly with respect to the fallout fromthe current economic crisis, when rating customers.

The change moves the extraordinary life circumstances provisionfrom a drafting note into the body of the model law, which wasoriginally adopted by NCOIL in 2002, and has been adopted by 26states since then. The NCOIL Executive Committee approved thechange last weekend at the group's Summer Meeting inPhiladelphia.

According to Susan Nolan, executive director of NCOIL, draftingnotes provide guidance, but do not carry the weight of text withinthe body of a model.

The amendment would apply to those who experience seriousillness or injury; death of a spouse, child or parent; divorce;identity theft; temporary loss of employment; or militarydeployment.

For applicants or insureds who experience an extraordinary eventimpacting their credit record who file a written request, carrierswill be required to provide an exemption from "rates, ratingclassifications, company or tier placement, or underwriting rulesor guidelines."

Ms. Nolan said NCOIL legislators wanted to make sure there was aprovision in the model to protect people who have been affected bythe current financial crisis.

NCOIL said insurance company and agent representatives supportedthe revision.

Deirdre Manna, vice president regulatory, industry and politicalaffairs for the Property Casualty Insurers Association of America,said, "The amendment provides maximum protection for consumersbeset by extraordinary life circumstances that negatively affecttheir credit standing while simultaneously affording insurancecompanies maximum flexibility in how they respond to suchconsumers. Insurers recognize that individuals encounter unforeseenor unexpected life circumstances."

She noted that about 11 states have already adopted some form ofextraordinary life circumstances protection already.