This was an attempt by the Governor to satisfy the House Democratic Caucus (the majority who are located in South East Michigan) that she was going to do something to lower insurance costs (unless we are talking about premium taxes).
Yes there are some problems with a few companies use of credit scoring, and those specific issues need to be addressed.
When this whole thing started, I was never more happy that my application to serve in OFIS was dropped after the election.
I can not disagree that credit scoring is useful in some areas…what I would like to see is all the companies getting on the same page so a credit score is not low in one company and high in another.
I think as we can not explain to our insureds how the credit score is derived, we need to be better educated in credit (as we are told by the companies we represent to explain to customers how they can better increase their credit scores).
I believe we should carry a credit counslers license. Maybe 10 more required educational credits to be added to our current required credits.
A checkoff at premium time would provide funds to review such issues and lobby apropriately.
A Senator in my state told me that he had sponsored legislation that limited the scope of CS in setting rates. He is a Republican and an owner of an Independent Insurance Agency. He feels the CS process is too easily skewed and too difficult to correct. “Often not fair” were words he used specifically.
He told me that in response to his sponsorship of the bill, “Several key companies attemepted to cancel their contracts” with him. They even told him the reason.
Uh RICO anyone? Time to rein it in a bit ladies and gentlemen. Spitzer and Madigan are nowhere near done. Actually with that in mind you may as well get while the getting is good.
Pat, I sure hope you’re joking. We have no right to be our client’s credit, let alone counsel them on it. I think credit scoring also should be looked at again: TO STOP IT! In my State, New Jersey, the companies raise the rates out of sight for poor credit, which is often in the county I’m trying to sell insurance in!
I keep reading that there is nowhere to “figure out how FICO scoring works.” There are several spots to do this. The best is http://www.myfico.com. I understand that there is a bunch of junk to buy their services, but there is some very valuable information for free. There is even a few brochures you can download for free. As an insurance agent, I feel it is not up to me to monitor my clients credit scores, but if it is going to have an impact on their premium or status, this information would only help.
As far as what to do about credit scoring; keep it. Not only does it project claims experience (which I feel is debatable), but it also leads into the administrative costs to process late payments, non-renewals, etc. and the issues surrounding them. However there should be exceptions for extenuating circumstances.
I agree with the principal of credit scoring just as banks do. However , the insurance industry, agents, who have to esplain rates to clients, in particular are kept in the dark as to how they are calucalated. There is no standard in the industry and credit scores can vary tremendously from company to company with no way to discern the reason. It appears insurance companies may be able to skew the ‘models’ used in scoring to attract or detract certain segments of the public. Not necessarily by income but more by area and various other critieria not known to anyone but the companies. As an independant agency owner, I believe it is a huge benefit for the general public, an issue for the minority with acceptable bad credit, but also should be somewhat standarized. The public needs to know how they are rated and why in order to improve their circumstances. As educated and involved as the public is tody, if the industry does not provide answers to these questions, they will force government to step in and that is not a good idea for anyone.
The simple fact is that the insurance industry is the most prejudice business in the country or even world for that matter. Regardless of whether they reform the credit guidelines or any of the other formatted rules it still puts us as agents in the hot seat with our clients.
This should be illegal. Never, at any time, should a SERVICE provider be able to check your credit, unless they are willing, and able to provide on time and good payment trade lines to the credit bureaus.
Insurance is something that you absolutely MUST have to be able to even have a legal automobile, therefore, I feel that it should be illegal to determine one’s credit is the sole reason for a discount on auto insurance. I also believe that it is discrimination against those who don’t have health insurance (as medical bills are the #1 reason most people have a low credit score), and that until the credit bureaus themselves can accurrately give credit scores, that don’t differ by hundreds of points of each other, this use of pulling someone’s credit for the purpose of a service, should be illegal for anything; not just automobile insurance.
Action based on rhetoric and fear mongering defeated! Now if Granholm would only get the message!
Thank God for the Judicial Branch.
This was an attempt by the Governor to satisfy the House Democratic Caucus (the majority who are located in South East Michigan) that she was going to do something to lower insurance costs (unless we are talking about premium taxes).
Yes there are some problems with a few companies use of credit scoring, and those specific issues need to be addressed.
When this whole thing started, I was never more happy that my application to serve in OFIS was dropped after the election.
I can not disagree that credit scoring is useful in some areas…what I would like to see is all the companies getting on the same page so a credit score is not low in one company and high in another.
I think as we can not explain to our insureds how the credit score is derived, we need to be better educated in credit (as we are told by the companies we represent to explain to customers how they can better increase their credit scores).
I believe we should carry a credit counslers license. Maybe 10 more required educational credits to be added to our current required credits.
needs a Citizen’s Insurance Board.
A checkoff at premium time would provide funds to review such issues and lobby apropriately.
A Senator in my state told me that he had sponsored legislation that limited the scope of CS in setting rates. He is a Republican and an owner of an Independent Insurance Agency. He feels the CS process is too easily skewed and too difficult to correct. “Often not fair” were words he used specifically.
He told me that in response to his sponsorship of the bill, “Several key companies attemepted to cancel their contracts” with him. They even told him the reason.
Uh RICO anyone? Time to rein it in a bit ladies and gentlemen. Spitzer and Madigan are nowhere near done. Actually with that in mind you may as well get while the getting is good.
We’ll see you around the settlement table.
Pat, I sure hope you’re joking. We have no right to be our client’s credit, let alone counsel them on it. I think credit scoring also should be looked at again: TO STOP IT! In my State, New Jersey, the companies raise the rates out of sight for poor credit, which is often in the county I’m trying to sell insurance in!
I keep reading that there is nowhere to “figure out how FICO scoring works.” There are several spots to do this. The best is http://www.myfico.com. I understand that there is a bunch of junk to buy their services, but there is some very valuable information for free. There is even a few brochures you can download for free. As an insurance agent, I feel it is not up to me to monitor my clients credit scores, but if it is going to have an impact on their premium or status, this information would only help.
As far as what to do about credit scoring; keep it. Not only does it project claims experience (which I feel is debatable), but it also leads into the administrative costs to process late payments, non-renewals, etc. and the issues surrounding them. However there should be exceptions for extenuating circumstances.
I agree with the principal of credit scoring just as banks do. However , the insurance industry, agents, who have to esplain rates to clients, in particular are kept in the dark as to how they are calucalated. There is no standard in the industry and credit scores can vary tremendously from company to company with no way to discern the reason. It appears insurance companies may be able to skew the ‘models’ used in scoring to attract or detract certain segments of the public. Not necessarily by income but more by area and various other critieria not known to anyone but the companies. As an independant agency owner, I believe it is a huge benefit for the general public, an issue for the minority with acceptable bad credit, but also should be somewhat standarized. The public needs to know how they are rated and why in order to improve their circumstances. As educated and involved as the public is tody, if the industry does not provide answers to these questions, they will force government to step in and that is not a good idea for anyone.
The simple fact is that the insurance industry is the most prejudice business in the country or even world for that matter. Regardless of whether they reform the credit guidelines or any of the other formatted rules it still puts us as agents in the hot seat with our clients.
And a right thinking judge.
“Insurance commissioner orders rate reduction” can be paraphrased:
“A tyrannical government ignores law and confiscates property of citizens.”
This should be illegal. Never, at any time, should a SERVICE provider be able to check your credit, unless they are willing, and able to provide on time and good payment trade lines to the credit bureaus.
Insurance is something that you absolutely MUST have to be able to even have a legal automobile, therefore, I feel that it should be illegal to determine one’s credit is the sole reason for a discount on auto insurance. I also believe that it is discrimination against those who don’t have health insurance (as medical bills are the #1 reason most people have a low credit score), and that until the credit bureaus themselves can accurrately give credit scores, that don’t differ by hundreds of points of each other, this use of pulling someone’s credit for the purpose of a service, should be illegal for anything; not just automobile insurance.
You can also check out some relevant pages dedicated to review .