Another revelation from the subprime market: FICO scores--the measure of credit risk put out by Fair Isaac Corp.--did not accurately predict the problems with subprime loans. FICO has revised its lending credit scores, yet there has been no recalibration of insurance scores.

Scores that were devised in a period of low foreclosures and better financial conditions are being inappropriately used in a radically different financial climate.

We have also seen the introduction of nontraditional lending credit scores after the revelation that 20-to-25 percent of the population was unscoreable with traditional methods because that portion of the population--largely low-income and minority--simply did not have enough information in the credit report.

New credit scoring tools are using nontraditional credit information, such as rent and utility payments. But again, there has been no analogous movement or change in insurance scores.

Despite the radical increase in foreclosures, delinquencies, bankruptcies, debt and the associated decline in insurance scores, personal lines claims have not been increasing at the same pace. Since 2003, clam frequencies for property damage, collision and comprehensive coverages have all decreased.

The bottom line is that many consumers are being penalized with higher auto and homeowners premiums because of insurance scoring--due to lenders' reckless and abusive lending decisions, and not because of any irresponsible behavior by consumers.

And the practice is moving to health insurance with the development of medical credit scores. Surely, state insurance regulators want to weigh in on this practice before it becomes entrenched.

Even today, lenders' business decisions continue to penalize consumers. Primary lenders tightened loan guidelines and redlined hundreds of communities around the country where home values have declined or may decline. Lenders holding second mortgages are preventing workout refinancing deals for consumers, thereby denying them a chance to keep their homes.

Just as it was lenders' business decisions that created problems for many consumers, it is now lenders' business decisions denying them opportunities to address the problem.

Bad as this is for so many consumers on the mortgage loan side, it is cruel to pile on with higher auto and homeowners insurance premiums because of insurance scoring.

There is clearly a crisis for many consumers, who are at risk of losing their homes and face associated financial pressures. Just as Congress and the states are taking action to help victimized consumers, states should do their part and, at a minimum, place a three-year ban on insurer use of consumer credit information.

The National Association of Insurance Commissioners has never developed a model law regarding the use of insurance scores. As a result, the National Conference of Insurance Legislators' model has been largely adopted in about half the states. The NCOIL model provides no substantive consumer protections--it is an example of "pretend" consumer protection.

But by deferring to NCOIL on this critical issue, the NAIC has allowed the NCOIL model to define insurance scoring regulatory oversight in many states and has enhanced NCOIL's profile because of the success of its model.

The NAIC has deferred to insurers on the evaluation of the impact of insurance scoring on consumers. Instead of collecting data and performing a rigorous analysis, the NAIC has allowed insurers to make any claims they want to state legislators without any corroboration by state regulators.

In addition, the NAIC has deferred to Washington--via the Federal Trade Commission--to study the impact of insurance scoring on low-income and minority consumers. The result was a study based on data hand-picked by the industry and a report that regurgitated unsubstantiated insurer claims about insurance scoring.

The NAIC has deferred to the courts--the U.S. Supreme Court, in particular--on adverse actions and ratemaking using insurance scoring. Instead of a model law that sets out a clear standard for when a consumer is harmed by insurance scoring, the states are now stuck with a terrible Supreme Court decision, which includes an unenforceable standard for "neutral" scores.

And now, Rep. Luis Gutierrez, D-Ill., has introduced H.R. 5633--the Nondiscriminatory Use of Consumer Reports and Consumer Information Act of 2008--which prohibits insurer use of consumer credit information if the FTC finds insurance scoring results in unfair discrimination or serves as a proxy for race.

So now we have a proposal to establish the FTC--a federal agency--as the organization that decides what is or is not unfair discrimination in insurance rating. You will excuse me if I ask, isn't that the role of state insurance regulators?

By continuing to defer to everyone else on insurance scoring, the NAIC and state insurance regulators are failing to protect consumers and missing the opportunity to make the case for state-based regulation.

We respectfully ask the NAIC to stop deferring to everyone else on insurance scoring and start taking action to protect insurance consumers. (See the accompanying infographic for three specific steps we would like to see the NAIC take.)

Crisis often brings opportunity. This subprime mortgage crisis and its fallout present an opportunity for the NAIC to finally and forcefully address consumer protections in insurance scoring.