INDIANAPOLIS (June 3, 2005)—Relying on an opinion from the Indiana attorney general and heeding concerns expressed by the National Association of Mutual Insurance Companies (NAMIC), the Insurance Institute of Indiana and other organizations, Insurance Commissioner Jim Atterholt brought Indiana in line with other states’ interpretation of the sole-use provision in the National Conference of Insurance Legislators (NCOIL) model act on credit-based insurance scoring.
“Commissioner Atterholt’s action makes Indiana consistent with all the other states’ interpretation of the term ‘solely’ that have passed the NCOIL model,” said NAMIC State Affairs Manager Tami Stanton. “Some positive action on the issue was anticipated based on an interview with Atterholt earlier this year, published by the Insurance Institute of Indiana.
After the 2003 session of the Indiana General Assembly enacted credit scoring legislation (SEA 178, P.L. 210) founded on the NCOIL model, the previous administration issued Bulletin 123 which reinterpreted the definition of the term “solely.”
Specifically, Atterholt has withdrawn Bulletin 123 on the use of credit-based scores by insurers and replaced it May 26 with Bulletin 130.
“Under Bulletin 123, an insurer could not deny, cancel, decline to renew or increase a renewal rate due to a credit score unless at least one other rating factor had changed to indicate a denial, cancellation, declination to renew or increase in the premium rate,” explained Stanton.
In the interview, Atterholt said the department was taking a hard look at Bulletin 123 and as “a former legislator, I want to make sure the department is not setting policy, but is reflecting the policy and goals of the Indiana General Assembly. The Attorney General issued an opinion that differed from the department and the previous administration. Based on the Attorney General’s opinion, we are uncomfortable with the position the department took in Bulletin 123. We will be addressing the issue in a way that we feel is better representative of the intent of the law in the next couple of months.
“As long as the market is competitive, and I believe we are blessed to have a very competitive market in Indiana, I do not feel the use of credit should be discouraged or encouraged by the Department of Insurance. It is a tool that is best left to the discretion of the industry, as long as the tool is not used in a way that is discriminatory.”
Posted: Friday, June 03, 2005 12:00:00 AM. Modified: Friday, June 03, 2005 1:35:42 PM.
317.875.5250 - Indianapolis | 202.628.1558 - Washington, D.C.