U.S. regulators have asked nine major insurance companies, including Allstate Corp. and Travelers Cos. Inc., to provide information about how they set prices for homeowners’ coverage, the Federal Trade Commission said Tuesday.
The FTC said it ordered the companies to provide data about credit-based insurance scores, essentially the equivalent of a credit rating but one that focuses on how much particular consumers cost their insurance companies.
Congress asked the FTC to look at the use of credit-based insurance scores in 2003. An FTC study on automobile insurance released in 2007 found that the scores allowed insurance companies to determine who was likely to be high risk and to charge those people more.
The study found African-Americans and Hispanics tended to have lower insurance scores than whites and Asians and, because of this, tended to pay more for auto insurance.
The other companies queried about the study for homeowners’ insurance were Chubb Corp., State Farm Mutual Automobile Insurance Co., Fire Insurance Exchange, Nationwide Mutual Insurance Co., United Services Automobile Association, Liberty Mutual Holding Co. Inc. and American Family Mutual Insurance Co.
The FTC said the insurers subject to the order have roughly 60 percent of the homeowners insurance market in the U.S. The affected companies have until April 24, 2009 to respond.
(Reporting by Diane Bartz; editing by John Wallace)
On the Web
The order itself can be found at the FTC web site at: http://www.ftc.gov/os/2008/12/P044804facta.pdf
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