The Montana House of Representatives has approved legislation to limit use of a valuable tool that allows insurers to accurately predict losses and price auto and homeowners products, the American Insurance Association (AIA) said.
“This bill will make it more difficult for insurers to set prices fairly, causing people who are lower risks to subsidize people who present a higher risk,” said Bill Gausewitz, AIA assistant vice president, western region. “The use of credit-based insurance scoring enables insurers to more accurately underwrite and price their products, allowing consumers to pay prices which accurately reflect their risk of loss.”
HB 184, sponsored by Rep. Bill Wilson (D) and the Montana Department of Insurance, prohibits insurers from denying coverage based solely on credit information and from canceling or refusing to renew policies based in whole or in part on credit information. The elements of credit information that may be used are also specifically limited. The legislation is modeled after a measure passed last year in Washington state.
“HB 184 ignores the fact that Montana law currently limits the use of credit information,” said Gausewitz. “In Montana, insurers are already prohibited from making adverse decisions solely on the basis of credit information unless they can show a correlation between credit information and risk.”
HB 184 was approved by the Montana House of Representatives by a vote of 87-11. The bill will now be sent to the Montana Senate for consideration.
Was this article valuable?
Here are more articles you may enjoy.