Following a week of intense negotiations, the Iowa Senate approved a bill to restrict credit-based insurance scoring by a vote of 49 to 0.
A coalition of industry advocates, led by captive-agent carrier State Farm, successfully amended the bill to more closely follow the National Conference of Inurance Legislators‘ (NCOIL) model. Several previous amendments offered by the independent agents, including language to remove the word “solely” from sections related to adverse actions, were not included in the bill.
The independent agents agreed to support the NCOIL-based bill if a provision relating to “no hits” was not included.
The provision in question (Section 5, E, 1 of the NCOIL model) states:
“Consider an absence of credit information or an inability to calculate an insurance score in underwriting or rating personal insurance, unless the insurer does one of the following:
1. Treat the consumer as otherwise approved by the Insurance Commissioner/Supervisor/Director, if the insurer presents information that such an absence or inability relates to the risk for the insurer.”
The agents argued that the NCOIL model language negatively impacts financially responsible individuals, such as senior citizens, who routinely use cash to make purchases and therefore may not have credit histories. Industry advocates and the agents will attempt to resolve their differences when the bill is debated in the House.
Was this article valuable?
Here are more articles you may enjoy.