Maryland Insurance Commissioner Steven Larsen announced the issuance of a bulletin affecting the implementation of a new state law, HB 521, that bans insurers from using credit scoring to rate and underwrite homeowners and auto policies.
According to the American Insurance Association (AIA), Larsen’s modification, Bulletin 02-16, affects carriers’ use of credit scoring to rate auto policies.
“The Commissioner has adopted a more balanced approach to implementing the new law than was originally proposed,” John Andryszak, AIA assistant vice president, mid-Atlantic region, said. “Most importantly, he did not artificially constrict rate increases that are otherwise warranted by a deterioration in driving experience or increased coverage needs, such as adding vehicles or drivers to an existing policy.
“While this most recent development is positive, we must remember that this new law is still extremely negative for responsible policyholders. This law is the most restrictive measure regarding the use of credit information in insurance transactions that has been put in place in the last several years in the entire country,” Andryszak added.
The AIA maintains that the new state law does not reward Maryland policyholders with good credit.
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