A New York Assembly bill that would reportedly prohibit insurers from
using credit scores in underwriting would do a greater disservice to consumers by eliminating a useful underwriting tool, according to the National Association of Independent Insurers (NAII).
“Insurers use credit scores as only one underwriting criterion,” Gerald Zimmerman, assistant general counsel for the NAII, commented. “Credit scores do not reflect age, race or sex, and are an accurate and valuable underwriting tool.”
The amended bill, A.B. 4754-A, was up for hearing this week in the assembly Committee on Insurance. The bill would prohibit insurers from setting rates, canceling coverage, or making adverse underwriting decisions against an insured based on credit history or credit score. The bill specifies that a violation constitutes unfair claim settlement practices.
“In most cases, consumers actually benefit from the use of credit scoring, since it is nondiscriminatory and most credit histories are clean,” Zimmerman said. “Removing credit scoring from an insurer’s underwriting methods will actually hurt the consumers legislators say they want to protect.”
Was this article valuable?
Here are more articles you may enjoy.