INDIANAPOLIS (Jan. 29, 2008) – The National Association of Mutual Insurance Companies (NAMIC) today congratulated the Colorado House of Representatives for rejecting the latest effort to ban credit-based insurance scoring for insurance rating and underwriting. The legislation would have forced Coloradoans with good credit-based insurance scores to pay more for their insurance, according to Christian J. Rataj, NAMIC’s Western state affairs manager.
“We’re pleased to see lawmakers have heeded the insurance industry’s warnings about the dangers of banning the use of credit-based insurance scoring and limiting a carrier’s ability to provide consumers with thorough and equitable risk-based rates,” Rataj said. “As the industry illustrated to members of the Legislature, studies have repeatedly shown that credit-based insurance scoring is a reasonable and appropriate underwriting and rating tool used to assist carriers in their endeavor to provide consumers with rates that are commensurate to their personal risk of loss exposure. Credit-based insurance scoring properly rewards and encourages all consumers to be thoughtful and diligent personal risk managers.”
The legislation, HB 1143, would have prohibited insurers from using credit-based insurance scoring for the acceptance, denial, renewal, or rating of a potential insured in connection with property/casualty insurance.
“Eliminating the use of credit-based insurance scoring for insurance underwriting would force the vast majority of Coloradoans who have good credit histories and risk-prevention histories to subsidize rates for those who have not engaged in personal risk management practices,” Rataj said. “We hope the proponents of this legislation realize that Colorado’s consumer protection laws are already among the strongest in the country on this issue and that banning credit-based insurance scoring would be unfair and costly for most consumers.”
The House rejected the bill by a vote of 39-26. “The vote to defeat HB 1143 is proof that legislators in the state see that the proposed credit-based insurance scoring ban would have adversely impacted market competition in the state, forced rate subsidizations on a significant number of consumers, and made it more difficult for insurance carriers to offer consumers with fair risk-based rates,” Rataj said. “Consumers want to have a choice in products, services and rates, and the defeat of this credit-based insurance scoring bill will help keep the Colorado insurance market vibrant.”
For further information, contact
State Affairs Manager - Western Region
(970) 204-6695 Tel
Director - Media Relations
(202) 628-1558 Tel
(202) 628-1601 Fax
Posted: Tuesday, January 29, 2008 12:00:00 AM. Modified: Thursday, February 28, 2008 2:27:15 PM.
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