INDIANAPOLIS – (March 17, 2008) – Legislation to prohibit the use of credit information in auto insurance rating was not approved before a procedural deadline by the Insurance and Real Estate Committee; and that is good news for Connecticut drivers, according to the National Association of Mutual Insurance Companies (NAMIC).
NAMIC strongly opposed the bill and warned lawmakers that it would hurt consumers. “As we argued in testimony before the committee, the bill would have interfered with the efficient functioning of the Connecticut insurance market and potentially increased rates for drivers with good credit histories,” said Paul Tetrault, NAMIC’s Northeast state affairs manager.
HB 5151, “An Act Prohibiting the Use of Credit Ratings to Set Motor Vehicle Insurance Premiums,” would have prohibited insurers from using credit information in setting auto insurance premiums. The measure ignored the predictive power of credit-based insurance scores and their potential for benefitting consumers, Tetrault explained.
“Study after study has demonstrated that insurance scores are effective predictors of claims and claims costs,” Tetrault said. “Moreover, they help consumers by letting insurers extend coverage offers and provide lower prices to more applicants and policyholders than they would otherwise.”
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Posted: Monday, March 17, 2008 12:00:00 AM. Modified: Monday, March 17, 2008 7:24:02 PM.
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