A Colorado House committee has killed two bills pertaining to the use of credit scores after amending them to delete their applicability to insurance.
Prior to the meeting of the House Information and Technology Committee, National Association of Independent Insurers (NAII) local counsel Bill Imig met with the sponsors of House Bill 1149 and HB 1188 to explain how the bills would raise the cost of auto and homeowners insurance for most consumers and make insurance less available. At the sponsors’ request, the committee agreed to delete the applicability to insurance in both bills. The committee then killed both bills after representatives of credit bureaus and lending institutions opposed the measures’ remaining provisions.
In its initial form, HB 1188 would have prohibited insurers from using credit-based insurance scores in all insurance transactions. HB 1149 would have placed insurers and others using credit scores in the unwieldy position of explaining the contents of consumer reports if they were even “contemplating” an adverse action affecting a consumer.
The Colorado Division of Insurance, which is developing a credit-based scoring regulation through a cautiously deliberative process, did not testify in support of either bill.
The groundwork for effectively removing the insurance provisions from the Colorado legislation was laid this past summer when NAII Northwest Regional Manager Michael Harrold, Imig and NAII member companies conducted a forum to educate legislators and regulators on the value of insurance scores.
Those forums documented the high correlation between insurance scores and insurance claims, enabling insurers to charge premiums that more closely reflect the risks involved.
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