Massachusetts Credit Scoring

[sankykid]

I've come across conflicting information about the use of credit scoring in Massachusetts. Some sources say it is banned for all personal lines insurance products, while others say it is allowed for homeowners and not personal auto. Can anybody shed some light on this murky topic?

Thanks.

[worcmassagent]

The Division of Insurance has stated that any personal auto filing that uses credit scoring for rating or underwriting will be rejected. The state agents' association has filed legislation to make that ban permanent but it was not acted on in this legislative session. On home insurance, credit scoring is allowed for rating. I've been told that the Division does not want companies to use credit scoring as the basis for rejecting an application - however, we have several home insurers that do that. When we run the credit score, they will come back with "ineligible" on the report. So, it's not used for auto but it is used for home.

[mica.cooper]

First, the NCOIL rules which all DOI's follow that I know of, specifically state that an applicant may not be rejected solely for a credit score.

There is a list of states allowing the use of credit scoring, Googling has failed me today but it exists. A simple call to the MA DOI should get you the answer....should lol.

The perception may be that they are rejecting solely based on this but almost surely it is a tier rejection, based on multiple criteria. Face it, not all companies can write all business. They are just not equipped to properly price and inspect it. Your an agent, find a suitable placement, that can appropriately serve your customer. Customers with low scores, bankruptcies, old or vacant properties, special hazards, etc require care to make sure they get the right policy, or YOU will get an E&O when the company rejects a claim.

FYI, the NCOIL also has a special provision for allowing an applicant to submit to an insurance company for an exception in the case of an extraordinary life event that alters their score.

[Mainemiss]

Interesting, the statment that clients may not be rejected based on credit score alone. There is one company with whom we write that does reject any client with a score below 625, no exceptions made and that is the only reason for rejection.

I would be interested to learn more about the NCOIL rules "which all DOIs follow." (or do they?)

[mica.cooper]

I do know of a few companies that have violated the rules. EVERYTIME they have been spanked solidly and quietly by the DOI. I would suggest that you call the DOI and complain. As far as NCOIL goes, Google is your friend, and will give you it.

[kcharette]

What's the significance of NCOIL? Doesn't the NAIC make model laws that most commissioners agree to?