Maine: Bill Restricting Use of Credit Amended to Require Notice

A bill that in its original form would have prohibited insurers from denying, canceling, or refusing to renew "based in whole or in part on a person’s credit information" has been amended to require insurers to provide notice to all insureds whose premiums are affected by use of credit, even if it means they are getting a lower rate.

The bill, LD-419, was approved by the House by a vote of 88-51 mostly along party lines, with Democrats in support and Republicans in opposition. It will next be taken up in the Senate, where it is expected to face more opposition. NAMIC offered testimony in opposition to the bill in its original form when it was before the Joint Committee on Insurance and Financial Services and will continue to support industry efforts to defeat the bill.

"Maine already has statutory measures governing insurers’ use of insurance scores," noted Paul Tetrault, NAMIC’s Northeast state affairs manager. "It doesn’t make sense to require insurers to provide notice when an insured’s premium is lower based on such use. This would increase expenses, and most notices would end up being discarded along with other required notices that do not mean much to consumers."

The amended version of the bill states that an insurer that "uses credit information to calculate an insurance score for underwriting and rating purposes…shall disclose to the insured that the insured is paying either a higher or lower premium based upon the insured's insurance score."

Direct questions to NAMIC State Affairs Manager Paul Tetrault.

Posted: Tuesday, May 01, 2007 12:00:00 AM. Modified: Tuesday, May 01, 2007 10:40:26 AM.

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