"In its current form, the FCRA has achieved an appropriate balance between the needs of business and the rights of consumers," said Monte Ward, vice president of federal affairs for the Indianapolis-based National Association of Mutual Insurance Companies.

The national standards contained in FCRA, which preempt state laws, are set to expire on Jan. 1, 2004.

Mr. Ward said that if Congress does not extend the standards, states will be able to enact differing and increased restrictions on the use of credit information.

The House Financial Services Committee held a hearing recently on FCRA extension.

Carl Parks, senior vice president of government relations for the Des Plaines, Ill.-based National Association of Independent Insurers, said the hearing made clear the vast impact the national credit system has on overall economic well-being.

He praised the Financial Services Committee for making FCRA a top legislative priority.

Regarding underwriting, Mr. Ward said that credit reports "serve as the foundation for important underwriting tools that allow insurers to qualify more, rather than less business for their underwriting programs."

Insurers use credit reports in many states to calculate insurance scores in order to underwrite and rate risks, he said.

"NAMIC is working with the other insurance trade associations to make sure that Congress continues to recognize insurance scoring as a valuable underwriting tool," Mr. Ward said.

Regarding information sharing, Allen Caskie, chief counsel with the Washington-based American Council of Life Insurers, notes that under FCRA, states cannot bar financial institutions from sharing certain types of credit information among affiliates.

ACLI is part of a coalition of financial services firms, called the Financial Services Coordinating Council, that lobbies Congress on financial services issues.

The American Insurance Association is also part of FSCC, as is the American Bankers Association and the Securities Industry Association. All are based in Washington.

Specifically, Mr. Caskie said, under FCRA, financial institutions can share what is called "experience and transactional" information among affiliates without limitations.

This type of information, he said, includes policy terms and payment history.

Other types of information, such as health and income, can be shared only if the consumer is notified and given the opportunity to opt out, Mr. Caskie said.

He noted, however, that some states are considering legislation that would place more restrictions on information sharing if FCRA's preemptions expire.

For example, Mr. Caskie said, California is considering a law that would require notice and opportunity to opt out for the sharing of experience and transactional information.