INDIANAPOLIS (July 9, 2010) The battle over credit-based insurance scoring in Michigan may finally have resolution as the state’s Supreme Court reversed the Appellate Court’s ruling in a decision released today.
The National Association of Mutual Insurance Companies (NAMIC) has been involved in this issue since the inception of the lawsuit to oppose the Office of Financial and Insurance Regulation rule to ban the use of this effective and premium saving underwriting tool.
“From opposing the first introduction of the rule, to fighting the appellate case, to joining an industry effort to offer amicus to the state’s Supreme Court, NAMIC is proud to stand alongside our partners as Michigan’s highest court proclaims that the then-commissioner ‘exceeded her authority’ and that the use of credit-based insurance scores are not unfairly discriminatory as was argued by Office of Financial and Insurance Regulation in the case,” said Neil Alldredge, NAMIC’s senior vice president of State & Policy Affairs. “This is the right decision for Michigan consumers.”
The use of insurance scores encourages competition and enables insurers to offer coverage to more consumers at a fairer price. Credit-based insurance scores have withstood much scrutiny and are shown not only to be non-discriminatory, but one of the most effective tools to accurately predict risk. The high court agreed, stating in its ruling, "It is difficult to see how offering discounts to some insureds on the basis of good insurance scores is inconsistent with the Insurance Code’s general purpose of availability and affordability of insurance for all consumers."
“We couldn’t be happier to get a fair outcome from Michigan’s high court, and we commend them for focusing on the law and rendering a decision that protects consumers,” Alldredge said. “Looking forward, NAMIC will join our trade partners in encouraging the Legislature to consider Representative Andy Neumann’s HB 5297 that adapts the NCOIL model on credit-based insurance scoring into Michigan’s insurance code.”
Twenty-six states now utilize the model legislation to regulate the use of credit-based insurance scoring. Several other states incorporate ideas or sections from the model to govern the use of the tool.
“This is a huge win for Michigan consumers and insurers to ensure that premiums are fair and accurate,” Alldredge said. “We’ll remain on the front line to ensure that our members have the tools available to them that they need to foster a healthy and competitive insurance market in Michigan and across the country.”
For further information, contact
Director of Communications State & Policy Affairs
(317) 876-4246 Tel