13 states file briefs against credit scoring

Delaware Commissioner of Insurance Matt Denn has taken arguments against insurance industry use of credit scoring to the U.S. Supreme Court, filing a brief in a pending case involving the practice.

The amicus curiae, or “friend of the court,” brief was filed in late December with the Supreme Court in Washington, D.C., in the cases of Safeco v. Burr and GEICO v. Edo. Consumers in the cases claim that insurance companies Safeco and GEICO violated the federal Fair Credit Reporting Act by not sending out “adverse action notices” required under FCRA when a consumer’s credit information results in the consumer receiving a higher rate.

Denn and 12 other insurance commissioners told the Supreme Court that they were filing their brief to “further their collective mission of protecting consumers by supporting interpretations of the FCRA that (a) put valuable information in the hands of consumers, (b) provide appropriate incentives for insurance companies that use consumer credit information to adopt procedures that assure compliance with the law, and (c) hold insurance companies accountable when they adopt policies that recklessly disregard consumer rights in contravention of the FCRA.”

The brief urges the Court to uphold the decisions of the 9th Circuit Court of Appeals in the Safeco and GEICO cases that the companies willfully disregarded the FCRA by not sending adverse action notices to some consumers.

“As long as our law allows insurance companies to use credit scoring, consumers deserve to know when something in their credit score has resulted in them getting higher rates,” Denn said.

The other states joining the brief include Arkansas, California, Georgia, Iowa, Kansas, Michigan, Montana, New Mexico, North Dakota, Oklahoma, Utah and Washington.