James Taylor, southeastern regional manager for the Des Plaines, Ill.-based National Association of Independent Insurers, observed that the proposed regulation carries many aspects of the model law developed last year by the National Coalition of Insurance Legislators.

Mr. Taylor said in a statement that although the proposal isn't perfect, "we believe in its current form the Mississippi regulation will address the most important concerns associated with the use of credit scoring."

One of the main provisions in the proposed regulation deals with "no-hits/thin files." The regulation would ban insurers from denying or non-renewing coverage solely based on incomplete credit history or even the lack of credit history if the carrier received accurate and complete information from the prospective client.

In Ohio, the state's insurance department is continuing to keep a close watch on the use of credit scoring by insurers. Earlier this month, insurance regulators in the state said they would conduct a review of insurance companies to find out how they are progressing toward complying with a new regulation that went into effect this past June.

The Ohio rule, which is also similar to the NCOIL model, prohibits insurers from using a consumer's credit score as the sole criterion for rating or underwriting personal auto and homeowners insurance policies. The new regulation would also require carriers to disclose certain information to consumers, including an explanation of credit report findings that can contribute to a higher rate or rejection of coverage.

The review, the insurance department stated, will begin this month by examining a sample of randomly selected carriers licensed to conduct business in Ohio.

From this sample, the department will analyze carriers' policies and procedures in using credit scores in the underwriting and rate-making process and see how these companies are preparing to comply with the new regulation. The state regulators noted that Ohio insurers must be in full compliance by Sept. 12.