During the first three weeks of the 2003 session, Indiana legislators have introduced five bills that would reportedly restrict the use of credit information in underwriting and rating policies, continuing a major debate on the issue that began in 2002.
One bill, House Bill 1213 was up for a hearing this week before members of the Indiana House Insurance, Corporations and Small Business Committee. The bill would impose numerous reporting requirements on insurers of their use of credit in the underwriting process.
“We want to preserve property/casualty insurance companies’ employment of insurance scoring and protect consumers from the unfair use of this data,” Robert Hurns, counsel of the National Association of Independent Insurers (NAII), said. “We encourage Indiana lawmakers not to make hasty judgments when considering severe restrictions to this sound and unbiased underwriting practice that benefits a majority of consumers.”
The bill is largely based on the National Conference of Insurance Legislators’ model bills on insurance scoring. But the bill deviates from the NCOIL model as insurers would be forced togive the consumer “at least” four reasons for an adverse action instead of “up to” four reasons, as specified in the NCOIL model. An adverse action could be a rate adjustment or refusal to renew a policy.
“Complying with the reporting provision would be extremely difficult because insurers only receive a computer-generated insurance scores, not detailed information about private factors in a person’s credit history,” Hurns continued. “In general, a less favorable score can be caused by late payments on bills, opening multiple credit card accounts, and bankruptcy filings. Policyholders themselves can obtain individual explanations of their credit ratings by contacting credit-scoring vendors.”
Four other insurance scoring bills in the General Assembly include: SB 178, which mirrors a bill that passed out of the Senate last year; SB 294 that would prohibit carriers from using adverse credit information to underwrite or price automobile insurance; HB 1187, which completely bans the use of credit; and HB 1323, which is similar to HB 1213.
Was this article valuable?
Here are more articles you may enjoy.
Cargo Owners in Baltimore Disaster Face ‘General Average’ Loss Sharing, MSC Says 
FBI Says Chinese Hackers Preparing to Attack US Infrastructure 
Why New York’s Attorney General Objects to Trump’s Bond Insurer 
Allstate Reports $731M in Q1 Pretax Catastrophe Losses 
