A prominent consumer advocate has called on insurance commissioners to suspend the use of credit background scores in rating insurance customers who suffer losses from Hurricane Katrina.
In a letter to National Association of Insurance Commissioner President Diane Koken, Birny Birnbaum, executive director of the Center for Economic Justice in Austin, Texas, said, "These consumers will be penalized by insurers' use of credit scoring because they were victims of a catastrophic event."
Even for the states with a "life events" exception for credit scoring, insurers fail to notify consumers of their rights, Mr. Birnbaum asserted.
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