Tennessee: NAMIC’s Reynolds Speaks on Status of Credit-Based Insurance Scoring

NAMIC Southeast state affairs manager Liz Reynolds appeared on an industry panel for Farmers Insurance agents during its annual Day at the Capitol event in Nashville March 5.

The panel discussion followed remarks by Tennessee Lt. Gov. Ron Ramsey. Other panel members included a representative from AIA and from PCI, Deputy Insurance Commissioner John Morris, and Department of Insurance Legislative Director David Braam.

Reynolds had been asked to discuss the status of credit-based insurance scoring regulation throughout the country. She emphasized that NAMIC continues to fight attempts to restrict insurers use of this proven tool for rating and underwriting, pointing out that “agents can be particularly helpful” in explaining to consumers the value of credit-based insurance scoring and how it differs from the use of credit scores in other segments of the financial services industry.

Reynolds later fielded a question about other types of predictive tools that may be in development. She agreed with the questioner that the insurance business is not static, and made the case for continuing to “encourage and preserve rating and underwriting freedom so that companies can react to changing market needs.”

Bills to restrict the use of credit-based insurance scoring have been introduced in Tennessee, but “they are not likely to move, considering Tennessee has already addressed this issue and appropriate safeguards are in place,” Reynolds said.

One bill that is moving in the Tennessee Legislature is HB 2547, a ban on “accident taxes.” It was amended and given a favorable report by the House Transportation Committee on March 4. “Tennessee could join the roster of other states trying to ‘nip it, nip it, nip it,’ in the words of Barney Fife,” Reynolds commented. “We will work together with other members of the industry to encourage a smooth path to passage there.”

Direct questions to NAMIC State Affairs Manager Liz Reynolds.

Posted: Tuesday, March 11, 2008 12:00:00 AM. Modified: Wednesday, March 12, 2008 11:21:59 AM.

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We are 1,400 property/casualty insurance companies serving more than 135 million auto, home and business policyholders, with more than $196 billion in premiums accounting for 50 percent of the automobile/homeowners market and 31 percent of the business insurance market. We are the largest and most diverse property/casualty trade association in the country, with regional and local mutual insurance companies on main streets across America joining many of the country’s largest national insurers who also call NAMIC their home. More than 200,000 people are employed by NAMIC members.