Again, the insurance industry proves that no expenses will be spared and no rocks left unturned. They are determined to twist and manipulate the law by any means possible to prevent the truth from being known. They object to the methodology used by the state of Missouri, but it is perfectly ok to profess the wonders of the UT study which used a methodology rejected by the NAIC as misleading.
There is no earthly reason for Insurers to use credit scoring for Underwriting purposes. Risk is not just a paper process, its visual. Go see the risks, assess and analyize each one, makes more professional sense then looking at a non-standard credit score. Does it really tell the Underwriter this is a poor, fair, good or excellent Insurance Risk? NO!
We have to many BEAN COUNTERS in the Insurance Business and No True Risk Underwriters. Get back to Underwriting Risks and we will see a reduction in costs from basic premiums to reinsurance.
I think the people should stand up to these large insureres. It’s the law we have to have car insurance and to have our credit scores linked to it is highly irregular. Our homeowners insurance is mandated by the banks and to have our credit scores linked to our homeowners insurance tells me they’re out to get our money and I’ve heard horror stories about what happens if you make a claim. Shut them down.
LG – As a retired Personal Lines Underwriter for 23 years, I couldn’t agree with you more!!!! Unfortunately, the true art of “underwriting” is no longer being used by the majority of Insurance Companies. In order to save them expenses, they have replaced the Underwriters who used intelligence, judgment, and their knowledge, with computer programs that “screen” all risks based upon numbers – including credit scoring!!!!! Even as an Underwriter, I was totally against Credit scoring as there are too many circumstances BEYOND THE CONTROL OF THE INSURED that can affect a “bad” credit score. The insurance companies are going to pull out all the stops and use millions of dollars to prevent the elimination of credit scoring and we all know in politics – money talks!!!
insurance companies cannot have it both ways. They have claimed a correlation between credit and claims. Every state should have the right to prove or disprove what insurance companies have crowed as fact.They use the Tillinghouse study (consigned by them)to back up their claims. However, only 40, yes I said 40, claims were used in that study just to fake everyone out. Someone should post that study in its entirety on the internet so we can all see how devious insurance companies can be. Credit scoring used to justify premiums for insurance is “redlining”. If it is a pig, call it a pig. Discrimination in any form is illegal and should not be allowed period. Shame on all insurance companies!!!!And shame on the insurance department in Alabama, such cowards, obviously they are not looking out for Alabama consumers. Hold the line, its the right thing to do.
The insurance industry is ‘circling the wagons’ and mounting an all out effort to supress any review of Credit Scoring. The louder they holler and the more they object, the more the regulators should examine the use of credit scoring in insurance underwriting and particularly personal lines.
It is a discriminatroy practice and is therefore in violation of all state insurance laws. The regulators should invite Fair-Isaacs to fully explain how they devised their credit scoring scheme and if they intended it to be used for underwriting personal auto insurance.
The regulators should then have the insurers and/or their trade associations explain how they have tweaked the Fair-Isaacs model and are applying it to personal lines underwriting.
The use of credit scoring is illegal in California yet the carriers do it. Allstate has been fined but the others keep doing it. The fact that the FTC under Fair Credit Act permit Credit Scoring in insurance underwriting is a reflection of the Republican majority in Congress but it does not make the use of Credit Scoring fair or relevant.
When insurers are allowed to spend millions generated from their policyholders to defeat efforts to protect consumers then something is seriously wrong with that picture.
– Due to recorded credit history being inaccurate at a ratio of 2 to 1, that industry in acknowledgement of the same has had to offer up free credit reports to everyone.
– The insurance industry would like to use this inaccurate data base as a false method of surcharging the American public, as the erroneous and uncorrected information is overwhelmingly negative.
– These are issues that should a part of the national debate, as it impacts the vast majority in this culture.
– I applaud the Ins. Dept’s that have met their duty to society and have not caved in, to the special interest of the Insurnace lobby.
How do you feel if you know your lower premium is becasue of your good credit score? If the credit scoring is totally wrong, why are so many insurers using it?
Many people with bad credit scores are those who are young and those who live in urban areas. Thay happen to be bad risks in traditional sense. Some people have a bad credit score because they were irresponsible in their financial decisions, or forgot to do something that they should did, both of which are definitely not good for vehicle/home ownership.
I am in insurance industry and did not like credit scoring at first. But the data does show some relation between claim costs and credit score. It’s just matters of to what degree this relation holds and how much this relation is contributed from other factors, such as age, risk location.
Again, the insurance industry proves that no expenses will be spared and no rocks left unturned. They are determined to twist and manipulate the law by any means possible to prevent the truth from being known. They object to the methodology used by the state of Missouri, but it is perfectly ok to profess the wonders of the UT study which used a methodology rejected by the NAIC as misleading.
There is no earthly reason for Insurers to use credit scoring for Underwriting purposes. Risk is not just a paper process, its visual. Go see the risks, assess and analyize each one, makes more professional sense then looking at a non-standard credit score. Does it really tell the Underwriter this is a poor, fair, good or excellent Insurance Risk? NO!
We have to many BEAN COUNTERS in the Insurance Business and No True Risk Underwriters. Get back to Underwriting Risks and we will see a reduction in costs from basic premiums to reinsurance.
I think the people should stand up to these large insureres. It’s the law we have to have car insurance and to have our credit scores linked to it is highly irregular. Our homeowners insurance is mandated by the banks and to have our credit scores linked to our homeowners insurance tells me they’re out to get our money and I’ve heard horror stories about what happens if you make a claim. Shut them down.
LG – As a retired Personal Lines Underwriter for 23 years, I couldn’t agree with you more!!!! Unfortunately, the true art of “underwriting” is no longer being used by the majority of Insurance Companies. In order to save them expenses, they have replaced the Underwriters who used intelligence, judgment, and their knowledge, with computer programs that “screen” all risks based upon numbers – including credit scoring!!!!! Even as an Underwriter, I was totally against Credit scoring as there are too many circumstances BEYOND THE CONTROL OF THE INSURED that can affect a “bad” credit score. The insurance companies are going to pull out all the stops and use millions of dollars to prevent the elimination of credit scoring and we all know in politics – money talks!!!
Joan,
If possible, please contact me at lawatch@cox.net
thx,
John
Joan,
If possible, please contact me at lawatch@cox.net
thx,
John
insurance companies cannot have it both ways. They have claimed a correlation between credit and claims. Every state should have the right to prove or disprove what insurance companies have crowed as fact.They use the Tillinghouse study (consigned by them)to back up their claims. However, only 40, yes I said 40, claims were used in that study just to fake everyone out. Someone should post that study in its entirety on the internet so we can all see how devious insurance companies can be. Credit scoring used to justify premiums for insurance is “redlining”. If it is a pig, call it a pig. Discrimination in any form is illegal and should not be allowed period. Shame on all insurance companies!!!!And shame on the insurance department in Alabama, such cowards, obviously they are not looking out for Alabama consumers. Hold the line, its the right thing to do.
The insurance industry is ‘circling the wagons’ and mounting an all out effort to supress any review of Credit Scoring. The louder they holler and the more they object, the more the regulators should examine the use of credit scoring in insurance underwriting and particularly personal lines.
It is a discriminatroy practice and is therefore in violation of all state insurance laws. The regulators should invite Fair-Isaacs to fully explain how they devised their credit scoring scheme and if they intended it to be used for underwriting personal auto insurance.
The regulators should then have the insurers and/or their trade associations explain how they have tweaked the Fair-Isaacs model and are applying it to personal lines underwriting.
The use of credit scoring is illegal in California yet the carriers do it. Allstate has been fined but the others keep doing it. The fact that the FTC under Fair Credit Act permit Credit Scoring in insurance underwriting is a reflection of the Republican majority in Congress but it does not make the use of Credit Scoring fair or relevant.
When insurers are allowed to spend millions generated from their policyholders to defeat efforts to protect consumers then something is seriously wrong with that picture.
– Due to recorded credit history being inaccurate at a ratio of 2 to 1, that industry in acknowledgement of the same has had to offer up free credit reports to everyone.
– The insurance industry would like to use this inaccurate data base as a false method of surcharging the American public, as the erroneous and uncorrected information is overwhelmingly negative.
– These are issues that should a part of the national debate, as it impacts the vast majority in this culture.
– I applaud the Ins. Dept’s that have met their duty to society and have not caved in, to the special interest of the Insurnace lobby.
End…
How do you feel if you know your lower premium is becasue of your good credit score? If the credit scoring is totally wrong, why are so many insurers using it?
Many people with bad credit scores are those who are young and those who live in urban areas. Thay happen to be bad risks in traditional sense. Some people have a bad credit score because they were irresponsible in their financial decisions, or forgot to do something that they should did, both of which are definitely not good for vehicle/home ownership.
I am in insurance industry and did not like credit scoring at first. But the data does show some relation between claim costs and credit score. It’s just matters of to what degree this relation holds and how much this relation is contributed from other factors, such as age, risk location.