"We are working to come to an agreement," said Randy McConnell, a spokesman for the Missouri Insurance Department. Missouri and seven other states involved were warned last month by the Property Casualty Insurers Association of America that their inquiry could spark a court fight.

Nat Shapo--the attorney and former Illinois insurance commissioner who represents PCI and two other trade groups in their fight to block any study by regulators--said today he had no comment about a possible deal.

According to Mr. McConnell, because litigation could impede the study, and "in the interest of getting something produced of value to consumers," discussions are underway to reach a deal.

He said the agreement being discussed would involve having the insurers give the information the states were seeking over to the Federal Trade Commission, which is under a Congressional mandate to do its own study of credit scoring.

If an agreement is reached, that study would be used in lieu of the multistate study, Mr. McConnell said.

The deadline for insurers to turn in the data requested for the study is Aug. 20.

Robert Zeman, senior vice president for the Des Plaines, Ill.-based PCI, announced last month that as the deadline for the data call neared, the organization would look at options, "including a potential legal action."

PCI as well as National Association of Mutual Insurance Companies and the American Insurance Association argue that the regulators are acting outside their legal authority.

The study has been provoked by concerns that credit scoring unfairly impacts minorities and fails to account for a variety individual circumstances that that can skew the results of a credit history.

Insurers argue that under law they can use the process to set rates as long as they underwrite objectively, regardless of how the process impacts consumers.

According to PCI, only three jurisdictions--California, Hawaii and Maryland--have some form of credit scoring ban, and efforts to secure a prohibition in other states, including Missouri, have failed.

Insurers support legislation based on a model credit scoring bill drafted by the National Council of Insurance Legislators, which 20 states have adopted in some form.

The latest among the states to adopt the NCOIL model was New York. The measure there was approved June 22, and became law without the governor's signature on July 27.

Under the New York measure, carriers are prohibited from using income, gender, address, ZIP code, ethnic group, religion, marital status or nationality as a factor in credit scoring.

It also forbids denying a policy for personal lines insurance solely based on credit information, would not permit its use to deny a renewal, and its score would have to be recalculated if a consumer requested it.

Consumers must be notified of adverse action based on a credit score, and the factor could not be used against those with no credit history.