NU Online News Service, Sept. 30, 3:58 p.m. EDT
Insurers and trade groups objected to a planned National Association of Insurance Commissioners' (NAIC) data call on credit-based insurance scoring during a recent NAIC committee hearing.
At the NAIC Property and Casualty Committee public hearing held today, Neil Alldredge, senior vice president for state at political affairs at the National Association of Mutual Insurance Companies (NAMIC), said his association "is completely opposed to this data collection exercise developed by the NAIC. Simply, it is too expansive, costly and misguided to justify."
The NAIC has said that the information gathered will be used for public policymaking but the Property Casualty Insurers Association of America (PCI) said that kind of repository already exists in various private and public studies on the use of credit scoring in underwriting. The trade association also has confidentiality concerns.
"We do not feel the information garnered from this data call–even if it could be accurately aggregated–adds in an appreciable way to the existing body of studies," said Alex Hageli, PCI's director of personal lines.
The data call "certainly does not add enough to justify the massive expense insurers will incur in replying to the data call, which ultimately harms consumers," Mr. Hageli added.
NAMIC said there have been 19 studies on the different uses of credit scoring and each came to a similar conclusion–that credit-based insurance scoring is a valuable and fair tool in underwriting.
The Heartland Institute submitted testimony written by policy advisor Lawrence S. Powell to point out that credit scores "are clearly indicative of risk," adding that he thinks the data call is "more extensive than necessary for achieving its objectives."
The National Conference of Insurance Legislators (NCOIL) has urged the NAIC to get behind its credit-based insurance scoring model law, which has been adopted in 27 states.
Want to continue reading?
Become a Free PropertyCasualty360 Digital Reader
Your access to unlimited PropertyCasualty360 content isn’t changing.
Once you are an ALM digital member, you’ll receive:
- Breaking insurance news and analysis, on-site and via our newsletters and custom alerts
- Weekly Insurance Speak podcast featuring exclusive interviews with industry leaders
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical converage of the employee benefits and financial advisory markets on our other ALM sites, BenefitsPRO and ThinkAdvisor
Already have an account? Sign In Now
© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
