Bill to Prohibit Insurer Use of Credit-Based Scores Defeated in Colorado
West News • January 26, 2005
On Tuesday, Colorado legislators "wisely" defeated a proposal to ban the use of credit-based insurance scores (SB 5), according to the American Insurance Association (AIA).
"The Senate Business ...
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Subject: Sample size
Posted On: January 30, 2005, 5:25 pm CST
Posted By: LLCJ
Comment:
many of the comments read here refer to personal experiences of clients' or friends whose claims history/driving record does not relate well to their credit risk. Of course. What you all have to realize is that these studies are done with hundreds of thousands of risks (if not millions). The studies establish strong trends. And it is these trends that enable rating.
I'm not a baseball person, but an imperfect analogy would be the baseball team that pulls its right handed pitcher because of a certain handed batter. Just because that batter hits a grand slam doesn't disprove the fact that right handed pitchers don't pitch well to certain handed batters.
For the one that said that numbers can be "massaged". When you're dealing with this many records, that is unreasonable. You are also assuming that there is an intention out there to discover it even if it isn't there. This point was addressed by the poster who pointed out that these studies were done by mathematicians at the University of Texas (non insurance people), and by actuaries (insurance people).
West News 
Subject: Sample size
I'm not a baseball person, but an imperfect analogy would be the baseball team that pulls its right handed pitcher because of a certain handed batter. Just because that batter hits a grand slam doesn't disprove the fact that right handed pitchers don't pitch well to certain handed batters.
For the one that said that numbers can be "massaged". When you're dealing with this many records, that is unreasonable. You are also assuming that there is an intention out there to discover it even if it isn't there. This point was addressed by the poster who pointed out that these studies were done by mathematicians at the University of Texas (non insurance people), and by actuaries (insurance people).