Mo. House Rejects Governor’s Amendments to Credit-Based Score Legislation

April 18, 2002

The Missouri House rejected amendments pushed by Gov. Bob Holden April 15 that would have seriously impaired insurers’ use of credit-based insurance scores. The House is expected to take a final vote later this week on the committee substitute for House Bill 1502 and 1821 and pass the legislation on to the Senate in its present form.

National Association of Independent Insurers (NAII) Counsel Ann Weber said she was pleased by the House’s action earlier this week.

Rating amendments pushed by Holden and the state Insurance Department would have undermined the value of insurance scores that are designed to base auto and homeowners insurance rates more accurately on the risks involved, which results in lower rates for most consumers.

Weber also said she appreciated the efforts of insurance agents in Missouri who have worked with insurance companies on the language of the bill.

In its current form, HB 1502 and 1821:

Prohibits insurers from using credit information as the sole factor in underwriting decisions.

Prohibits insurers from taking an adverse action solely on the basis that an insurance applicant or customer does not have an established credit rating.

Provides guidance to consumers on how to obtain their credit reports and how to challenge disputed information.

Clarifies that insurance will be affected by shopping for insurance.

“Insurance scores can help predict which individuals are more likely to file an insurance claim in the future. Independent studies and insurance statistics clearly document the correlation,” Weber asserted.

“Since most consumers have good insurance scores, insurers that are free to use them as their experience shows is most appropriate results in lower premiums for many people. That is fairer to everyone.”

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