The Delaware Senate has voted for compromise legislation that will allow insurers to continue to consider credit history information in the underwriting process.
Insurance Commissioner Matthew Denn’s original bill had proposed banning insurers’ use of credit scoring in personal lines insurance.
Under the compromise, SB 2 would prohibit insurers from using credit history as the sole reason for new policy underwriting and rating decisions, similar to regulation already in place in the state. The compromise bill, however, also prohibits insurers from increasing renewal premiums due to a change in credit history. Insurers will not be permitted to reevaluate credit information unless specifically asked to do so by policyholders.
Property casualty insurers accepted the compromise.
“Although this bill will restrict insurer consideration of credit information far more than in the vast majority of other states, we are pleased that insurers will be able to use this highly predictive information,” said Lynn Knauf, Property Casualty Insurers of America, director of personal lines.
“Not all insurers choose to use credit information, but all recognize the importance of preserving the right to use objective and accurate underwriting tools,” said Richard Stokes, PCI regional manager.
Source: PCI
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