Kansas consumers should be told how credit scoring affects their insurance rates, Kansas Insurance Department Commissioner Sandy Praeger said in a written statement.
Kansas now has “no specific statutory oversight of the use of credit-based insurance scores,” Praeger said, meaning there are no restrictions on how credit scoring may be used by insurers in setting rates or deciding to deny, cancel or non-renew policies.
A task force created by the Kansas legislature last year agreed that there should be some limits placed on credit scoring, but that it should be not be banned entirely.
The Kansas Insurance Department has introduced legislation based on a model bill created by the National Conference of Insurance Legislators that was agreed to by insurers, agents and legislators.
The bill, which applies only to personal and not commercial lines, prohibits insurers from setting rates, denying, canceling, or non-renewing a policy based solely the credit score — or lack of credit history — and requires insurers to rescore a person’s credit upon the applicant’s request.
The bill also requires insurers or their agents to inform applicants that their credit report will be reviewed and explain any adverse action taken based on the applicant’s credit score.
Topics Kansas
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