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The Nebraska legislature has joined North Dakota in adopting the National Conference of Insurance Legislators’ (NCOIL) model act for credit-based insurance scoring. Kansas also has passed legislation that follows much of the NCOIL model.

The NCOIL model requires an insurer to notify an applicant for insurance that credit information will be used in underwriting and rating. Credit information cannot be used as the sole basis for denying, canceling or non-renewing a policy or increasing rates.

The model requires customer notification of the primary factors that resulted in an adverse action being taken. The scoring model used must be filed with the department of insurance that will protect the model as a trade secret.

In Nebraska, LB 487 originally did not contain the NCOIL language regarding trade secret status for the scoring models. Insurance lobby groups were successful in amending the bill to include this aspect of the model act.