Tennessee Code 56-5-203 – Notice to consumer of adverse action
Terms Used In Tennessee Code 56-5-203
- Adverse action: means a denial or cancellation of, an increase in any charge for, or a reduction or other adverse or unfavorable change in the terms of coverage or amount of, any insurance, existing or applied for, in connection with the underwriting of personal insurance. See Tennessee Code 56-5-201
- Consumer: means an insured whose credit information is used or whose insurance score is calculated in the underwriting or rating of a personal insurance policy or an applicant for the policy. See Tennessee Code 56-5-201
- Credit information: means any credit-related information derived from a credit report, found on a credit report itself, or provided on an application for personal insurance. See Tennessee Code 56-5-201
- Person: means any association, aggregate of individuals, business, company, corporation, individual, joint-stock company, Lloyds-type organization, organization, partnership, receiver, reciprocal or interinsurance exchange, trustee or society. See Tennessee Code 56-16-102
If an insurer takes an adverse action based on factors that include credit information, the insurer must provide notice to the consumer that an adverse action has been taken. That notice must contain the reason or reasons for the adverse action, described in sufficiently clear and specific language so that a person can identify the basis for the insurer’s decision to take an adverse action. The notice must include a description of up to four (4) factors that were the primary influences of the adverse action. The use of generalized terms such as “poor credit history,” “poor credit rating,” or “poor insurance score” does not meet the explanation requirements of this section. Standardized credit explanations provided by consumer reporting agencies or other third party vendors are deemed to comply with this section.