The New Hampshire Insurance Department has validated the opposition of the American Insurance Association to a proposal to require prior written approval from consumers before insurers can use credit scoring by withdrawing and rewriting the regulation.
The first draft of the rule was presented to the Joint Legislative Committee on Administrative Rules in April 2001 because, but met opposition from the AIA, as it required a written authorization from the consumer for an insurer to use a credit based insurance score. The NHID withdrew the proposal in May 2001, and redrafted the rule along the lines suggested by the AIA input not to require the . written authorization.
“The written authorization requirement was unworkable,” stated Donald Baldini, AIA assistant VP northeast region. “Often, insurance shopping is conducted over the telephone. The written authorization requirement would have put an unnecessary barrier in the way of consumers and agents who are trying to find the best insurance policy by telephone.”
Under the new proposal an insurer would be required to rerun an individual’s insurance score on every third renewal, if an insurance score was used initially. The AIA indicated that, “Under New Hampshire law, if the score improves, the insurer must improve the individual’s rating. If the score is lower, the insurer cannot downgrade the individual’s rating.”
“AIA believes that, in fairness, an insurer should be able to use a customer’s current score, whatever it is,” Baldini indicated. “The use of insurance scores benefits consumers because it gives insurers a cost-effective, objective underwriting and rating tool. As a result, more companies are able to write more insurance for more individuals. The result is more choice for consumers and in many cases, lower costs.”|”nh, insurance, dept., adopts, aia, proposal, on, credit, scoring