A Montana bill that would have established reasonable and clear guidelines for the use of credit scoring in insurance underwriting and rating is dead, due in large part to disagreements between the insurance commissioner, insurers and legislators. Another bill that placed severe restrictions on an insurer’s use of credit died earlier in the session.
“S.B. 349 was based on the NCOIL credit scoring model, and would have established clear guidelines for credit scoring use,” said Donald S. Cleasby, assistant vice president and assistant general counsel of the National Association of Independent Insurers (NAII).
A bill promoted by the insurance commissioner, H.B. 184, placed undue restrictions on insurers’ use of credit and failed to progress out of Senate Committee.
“The failure of both these bills results in a status quo situation in
Montana on regulation of insurance credit scoring since Insurance Commissioner Morrison had indicated he needed legislation in order to more fully regulate how insurers use credit,” Cleasby said.
Under current state law, use of credit scoring is prohibited as a sole criterion in insurance rating and underwriting in most cases.
“The fact that insurers, regulators and legislators couldn’t agree on which approach to take clearly demonstrates the need for further dialogue on the credit scoring issue,” Cleasby said. “The NAII is willing to continue discussions with all sides to try and reach an appropriate legislative response to this matter.”
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