Trouble with most Ins. Co’s is that they don’t want to spend the money to have professional, well educated Underwriters who have the brains and knowledge to use judgment when making an Underwriting decision. It is cheaper for Ins. Companies to program a computer to make “decision” based on black and white guidelines that include Credit Scoring, CLUE reports, etc. and pay someone to “underwrite” on a Clerical pay scale!
Hooray to the State of Indiana Insurance Department in banning credit as a rating factor. (Claims Guide National News 5-20-04). Not the same Kudos for PCI, NCOIL and/or ACIC in their efforts to promulgate a system supported by core groups intent on widening the gap for individuals who at one time were â€Ŕpreferred†customers, but who have unfortunately come upon bad times as a result of the economy. The intent is clear, given the statement issued by John Lobert, PCI VP (Claims Guide 5-19-04) –â€ŔWhile a relatively quite year on auto issues, insurance credit scoring continues to be a main focus. The industry was relatively successful in legislatures since 13 states last year that passed some form of the National Conference of Insurance Legislators (NCOIL) credit scoring model – while another three have this year.†There is certainly disagreement by the insurance industry as to key regulatory components and legislative issues. Mr. Lobert further states (5-19-04 Claims Guide News) â€ŔPCI has an aggressive plan to address the more troublesome aspects of state regulation in key states while at the same time working with Congress to make sure that anything orchestrated is in sync with our members desires.†Influencing would better describe PCI, NCOIL and ACIC’s efforts to assure the synchronization and orchestration of such groups to enforce their â€Ŕmembers desires.†And…What exactly are those desires? To retain and increase profit margin based upon several factors, the most influential of which appears to be â€Ŕcredit history.†Per the article published in Claims Guides – West News – 5-19-2004 ACIC Opposing Anti-Credit Bill – Comments ACIC President Sam Sorich – â€ŔInsurers that consider credit information in their underwriting and pricing decisions do so for only one reason – credit-based insurance is an objective tool that allows insurers to underwrite or rate business with a greater degree of certainty and accuracy. More accurate underwriting and rating means that policyholders enjoy a rate more fairly based upon their own risk of loss – and the majority of consumers benefit through lower rates than would otherwise be possible.†Coming from a claims background, I can assure you that MONEY and its influence is overpowering. The rich get richer and as such, are able to circumvent around the most troubling of circumstances. Money Talks. Those individuals who are able to maintain themselves in the this economic strata are able to maintain their anonymity and ergo are â€Ŕable to enjoy a rate more fairly based upon their own risk of loss.†Mr. Sorichs’ comment regarding insurers utilization of credit information as an objective tool is correct, in that the objective is to keep the economically suppressed individual and/or families contained within a system, which may or may not reduce insurance premiums based upon a credit score. In the same light, the insurance industry awards wealthy insureds with lower premiums based on credit. I know that I can attest to the fact that â€Ŕlosses†involving wealthy assureds occur more frequently than not, and that the severity and frequency of those losses do affect the insurance carriers bottom line and ergo rates. But whose rate does it affect? If the economically endowed are able to deflect and hide behind rates based on Credit History rather than actual losses, how then can Mr. Sorich state that â€Ŕpolicyholders enjoy a rate more fairly based upon their own risk of loss.†No pun intended, but maybe that’s why he’s Soooooo Rich!
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Trouble with most Ins. Co’s is that they don’t want to spend the money to have professional, well educated Underwriters who have the brains and knowledge to use judgment when making an Underwriting decision. It is cheaper for Ins. Companies to program a computer to make “decision” based on black and white guidelines that include Credit Scoring, CLUE reports, etc. and pay someone to “underwrite” on a Clerical pay scale!
Hooray to the State of Indiana Insurance Department in banning credit as a rating factor. (Claims Guide National News 5-20-04). Not the same Kudos for PCI, NCOIL and/or ACIC in their efforts to promulgate a system supported by core groups intent on widening the gap for individuals who at one time were â€Ŕpreferred†customers, but who have unfortunately come upon bad times as a result of the economy. The intent is clear, given the statement issued by John Lobert, PCI VP (Claims Guide 5-19-04) –â€ŔWhile a relatively quite year on auto issues, insurance credit scoring continues to be a main focus. The industry was relatively successful in legislatures since 13 states last year that passed some form of the National Conference of Insurance Legislators (NCOIL) credit scoring model – while another three have this year.†There is certainly disagreement by the insurance industry as to key regulatory components and legislative issues. Mr. Lobert further states (5-19-04 Claims Guide News) â€ŔPCI has an aggressive plan to address the more troublesome aspects of state regulation in key states while at the same time working with Congress to make sure that anything orchestrated is in sync with our members desires.†Influencing would better describe PCI, NCOIL and ACIC’s efforts to assure the synchronization and orchestration of such groups to enforce their â€Ŕmembers desires.†And…What exactly are those desires? To retain and increase profit margin based upon several factors, the most influential of which appears to be â€Ŕcredit history.†Per the article published in Claims Guides – West News – 5-19-2004 ACIC Opposing Anti-Credit Bill – Comments ACIC President Sam Sorich – â€ŔInsurers that consider credit information in their underwriting and pricing decisions do so for only one reason – credit-based insurance is an objective tool that allows insurers to underwrite or rate business with a greater degree of certainty and accuracy. More accurate underwriting and rating means that policyholders enjoy a rate more fairly based upon their own risk of loss – and the majority of consumers benefit through lower rates than would otherwise be possible.†Coming from a claims background, I can assure you that MONEY and its influence is overpowering. The rich get richer and as such, are able to circumvent around the most troubling of circumstances. Money Talks. Those individuals who are able to maintain themselves in the this economic strata are able to maintain their anonymity and ergo are â€Ŕable to enjoy a rate more fairly based upon their own risk of loss.†Mr. Sorichs’ comment regarding insurers utilization of credit information as an objective tool is correct, in that the objective is to keep the economically suppressed individual and/or families contained within a system, which may or may not reduce insurance premiums based upon a credit score. In the same light, the insurance industry awards wealthy insureds with lower premiums based on credit. I know that I can attest to the fact that â€Ŕlosses†involving wealthy assureds occur more frequently than not, and that the severity and frequency of those losses do affect the insurance carriers bottom line and ergo rates. But whose rate does it affect? If the economically endowed are able to deflect and hide behind rates based on Credit History rather than actual losses, how then can Mr. Sorich state that â€Ŕpolicyholders enjoy a rate more fairly based upon their own risk of loss.†No pun intended, but maybe that’s why he’s Soooooo Rich!