Colorado Senators KO Credit Ban
West News • January 28, 2005
By a 5-2 bipartisan vote members of the Colorado Senate Business, Labor and Technology Committee rejected a measure that would have banned insurers from using credit history to underwrite and rate ...
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Subject: RE: RE: It's not low income and minorities
Posted On: January 28, 2005, 4:04 pm CST
Posted By: W.S.
Comment:
...and use of MVR's, age, location, sex, previous claim history all have weaknesses. None purely evaluate or apportion risk, but all are good tools. All have arguments for certain segments, certain conditions, evaluating risk, profiling people is not a science. So are you saying if the tool used can be imperfect, it should not be used at all? (Ok, we're back to a flat rate for everyone then right?).
Are you saying there is no arguments against the use of say MVR's? Your example, someone with a DUII but also a good credit score shouldn't get cheap rates. Well, what about the middle aged married male with a speeding ticket? They will more often continue to get the cheapest rate available, yet the "poor teenager" with a speeding ticket is gonna get whammed, so I'll apply your argument in opposition to the use of MVR's. Shouldn't use them, right? Their use is not fair? The use of MVR's is discriminatory right? Oh then there's "but that's my son, and the speeding ticket was on a flat wide road in the country with no cars around" so that one's ok?
Not many credit inquiries or enough credit data comes up as such and won't produce a score, and will not be used as a rating factor. Good reason's not to use scoring as a tool. How come it's ok to us the MVR in the first say year of a new driver?
Disputes, yes the credit companies need to improve that, but I've handled a credit correction for a client recently, and with a little work (on our behalf for the client) we got things fixed.
Yes each company has it's own model, and why are some found to be a good risk to Company A vs bad risk to Company B. Why would we want all our companies to rate people the same? Isn't this competition? Wouldn't we want companies to attempt to try and be better than the competition? Don't we want to have Company A cater to a specific niche of the population? Why not let Company B take some of what Company A isn't catering to since their focus and resources are focused on some other niche? You want to go back to a flat rate on everyone again? Some of my companies won't write homes in a PC 10, others will. Is that a problem? Some won't even to homeowners. Maybe we ought to make'em!
So you'd blindly loan to someone with a good score sure, but there ARE other criteria that ARE used to judge a good risk, as I've illiterate above. Why do you say credit scores favor the insurance companies....period? What do you tell the 40% who receive a lower premium due to credit score use? Credit scores favor the insurance companies no more than use of age, territory, sex, MVR, claim history, vehicle use, marital status, must I go on?
Come on people, let the insurance companies use more tools to open up the differential in rates so that those who may have a lower risk, receive the reward, and those with higher risk, bear more of their share. Adding evaluation or underwriting tools simply more accurately prices the individual! Experian's study with Progressive's book in the 90's clearly revealed the additional use of scores more accurately rated 40 % of their clients than Progressive did without scores. I myself would like to be 40% more accurately rated, wouldn't you? (unless you have a poor score, but you know what, you can easily improve your score over a 6 month period and then obtain cheaper rates!)
W.S.
West News 
Subject: RE: RE: It's not low income and minorities
Are you saying there is no arguments against the use of say MVR's? Your example, someone with a DUII but also a good credit score shouldn't get cheap rates. Well, what about the middle aged married male with a speeding ticket? They will more often continue to get the cheapest rate available, yet the "poor teenager" with a speeding ticket is gonna get whammed, so I'll apply your argument in opposition to the use of MVR's. Shouldn't use them, right? Their use is not fair? The use of MVR's is discriminatory right? Oh then there's "but that's my son, and the speeding ticket was on a flat wide road in the country with no cars around" so that one's ok?
Not many credit inquiries or enough credit data comes up as such and won't produce a score, and will not be used as a rating factor. Good reason's not to use scoring as a tool. How come it's ok to us the MVR in the first say year of a new driver?
Disputes, yes the credit companies need to improve that, but I've handled a credit correction for a client recently, and with a little work (on our behalf for the client) we got things fixed.
Yes each company has it's own model, and why are some found to be a good risk to Company A vs bad risk to Company B. Why would we want all our companies to rate people the same? Isn't this competition? Wouldn't we want companies to attempt to try and be better than the competition? Don't we want to have Company A cater to a specific niche of the population? Why not let Company B take some of what Company A isn't catering to since their focus and resources are focused on some other niche? You want to go back to a flat rate on everyone again? Some of my companies won't write homes in a PC 10, others will. Is that a problem? Some won't even to homeowners. Maybe we ought to make'em!
So you'd blindly loan to someone with a good score sure, but there ARE other criteria that ARE used to judge a good risk, as I've illiterate above. Why do you say credit scores favor the insurance companies....period? What do you tell the 40% who receive a lower premium due to credit score use? Credit scores favor the insurance companies no more than use of age, territory, sex, MVR, claim history, vehicle use, marital status, must I go on?
Come on people, let the insurance companies use more tools to open up the differential in rates so that those who may have a lower risk, receive the reward, and those with higher risk, bear more of their share. Adding evaluation or underwriting tools simply more accurately prices the individual! Experian's study with Progressive's book in the 90's clearly revealed the additional use of scores more accurately rated 40 % of their clients than Progressive did without scores. I myself would like to be 40% more accurately rated, wouldn't you? (unless you have a poor score, but you know what, you can easily improve your score over a 6 month period and then obtain cheaper rates!)
W.S.