Insurers Focused on Credit Scoring During 2002 Missouri Legislative Session

Outside of credit-based insurance scoring, which was the subject of extensive negotiations, the state legislative session that concluded last week passed few matters of concern to the insurance industry, according to the National Association of Independent Insurers (NAII).

“While we really don’t see the need for any legislation on insurance scores, legislators did consider the concerns of insurance agents and companies before passing House Substitute Bill 1502/1821,” said NAII counsel Ann Weber. “The overriding factor that everyone should keep in mind is that insurance scores enable insurers to set rates that more accurately reflect risks involved, which is fairer for all consumers and avoids requiring low-risk individuals to subsidize those who are higher risks.”

HB 1502/1821, if signed by Gov. Bob Holden as expected, will go into effect July 1, 2003. The bill provides that insurers cannot take adverse action against an applicant or policyholder in the following circumstances:

Using credit information as the sole factor in underwriting.

Based on credit information contained in a credit report that the insurer knows is in dispute.

Using credit information in renewing a contract until at least three years after the policy was issued.

In addition, an insurer cannot use the number of insurance inquiries that an applicant makes as a negative factor in evaluating the application.

In other legislative activity, NAII and other insurance interests were successful in bottling up and killing HB 2160, which would have imposed a surcharge on auto insurance policies to finance a police chiefs and officers retirement fund.

“That surcharge would have been a discriminatory tax since it targeted only people who buy auto insurance,” Weber asserted. “The additional expense also might perpetuate Missouri’s uninsured motorist problem because of the higher insurance rates it would cause.”

Bills of interest to the insurance industry that died during the session include:

SB 1157, that would have allowed insurers to keep confidential any information they collect in the course of conducting a self-audit to assure their compliance with state laws and regulations.

HB 1642 and SB 1014, that would have enacted the Uniform Electronic Transactions Act, facilitating transactions on the Internet.

HB 1742, that would have modified the workers’ compensation law to provide for reasonable reimbursable fees for managed care services.

SB 1105, that would have prohibited employees from recovering workers’ comp benefits for aggravated pre-existing injuries, except to the extent the work-related injury increased the pre-existing disability.

SB 631, that would have required an employee to submit to a reasonable medical examination at the state’s request if there is a second injury claim under workers’ compensation.

SB 832, that would have modified provisions for examination by an impartial physician in relation to second injury fund claims under workers’ comp.

SB 647, that would have required drivers to install child-restraint systems for children four to eight years old and to require children to wear seat belts up to age 16.

SB 646, that would have exempted anyone 21 years of age or older from state motorcycle helmet requirements.

Topics Carriers Workers' Compensation Missouri