They have not & they will not. They claim they can’t reveal the formulae for determining rates based on credit scores. They call them proprietary secrets, even though other companies are doing the same thing. It’s a great tool for arbitrarily raising rates without having to pass it through the regulatory agencies,—anytime, anyplace to anybody.
Think what you want, credit scoring is a pretty good predictor of loss results. Now if you want to argue if it’s fair or penalizes certain groups then that’s a different argument.
Anyone notice that they equate homemakers with having never been employed, and, unlike other occupations prohibit carriers from giving any weight to that even if they can prove correlation to risk of loss?
As underwriting variables, I can’t imagine that occupation & education are anywhere near as strong as financial history (credit). So many different occupations now that have overlapping titles & job duties and that would seem to dilute the data. Plus it’s never verified and it changes. Wouldn’t think companies are being punished too hard if they weren’t allowed to use it.
Wonder why they didn’t throw in Credit Score in these regulations? Was there a trade off?
Have they used this rating factor in other states as well? Have they proven that credit scores are a good predictor of claims?
They have not & they will not. They claim they can’t reveal the formulae for determining rates based on credit scores. They call them proprietary secrets, even though other companies are doing the same thing. It’s a great tool for arbitrarily raising rates without having to pass it through the regulatory agencies,—anytime, anyplace to anybody.
Think what you want, credit scoring is a pretty good predictor of loss results. Now if you want to argue if it’s fair or penalizes certain groups then that’s a different argument.
Anyone notice that they equate homemakers with having never been employed, and, unlike other occupations prohibit carriers from giving any weight to that even if they can prove correlation to risk of loss?
As underwriting variables, I can’t imagine that occupation & education are anywhere near as strong as financial history (credit). So many different occupations now that have overlapping titles & job duties and that would seem to dilute the data. Plus it’s never verified and it changes. Wouldn’t think companies are being punished too hard if they weren’t allowed to use it.