Policyholders in North Dakota may soon be protected from being penalized for merely asking whether their policy covers specific losses. Under a bill (SB 2186) already approved by the Senate and passed March 28 by the House, insurers would be limited in the types of background information they can use to underwrite personal insurance coverage.

Among the inquiries or claims history that could not be considered in underwriting under this legislation are: an insured's inquiry into the type or level of coverage or an inquiry into whether a policy will cover loss; an insured's inquiry regarding coverage for a loss if the insured files no claim; or a claim if the insurer makes no payment to or on behalf of the insured and the claim does not involve deceptive practices on the part of the insured. The bill also prevents property insurers from using a prior owner's loss history.

North Dakota Insurance Commissioner Jim Poolman initiated the legislation. Poolman told A.M. Best the legislation "sets the floor for common sense regulation, in determining the appropriate use of valid and non-valid loss history." He praised the legislature for taking a bold step on behalf of consumers.

April 5, 2005