Oregon Voters Defeat Credit Scoring Ballot Measure

November 8, 2006

Oregon voters rejected Measure 42 — which would have banned the use of credit-based insurance scoring — by nearly a two-to-one margin of 65.58 percent to 34.42 percent — in yesterday’s election.

The initiative had been watched closely across the nation, as the insurance industry believed it could be a precedent other states would follow. According to three insurance trade associations, Measure 42 would have increased premiums for most of the state’s residents by prohibiting insurers from using credit information in determining personal (homeowners, auto) and commercial rates.

Pat McCormick, spokesman for Oregonians Against Insurance Rate Increases that had campaigned to defeat the measure, said the rejection “is a victory for Oregon consumers and, quite possibly, for consumers across the nation.”

“Voters here sent a strong message of support for credit-based insurance scoring — a ratemaking tool insurers use to evaluate risk and set accurate, fair insurance rates. They understood that, if Measure 42 passed, consumers would lose the lower rates most now enjoy because they manage personal finances responsibly,” he said.
“Their overwhelming decision to reject Measure 42 shows a strong majority of voters are satisfied with the consumer protections already in Oregon law. The margin of defeat here is likely to discourage efforts in other states to ban the practice.”

“We are very pleased that Oregon voters understood the harm Measure 42 would have caused – higher insurance rates for 60 to 70 percent of Oregonians. This vote represents the public’s continuing support for insurance pricing that reflects risk. Voters understood that Oregon already has one of the strongest consumer protection laws in the country and this initiative would have unnecessarily increased rates,” said Kenton Brine, northwest regional manager, Property Casualty Insurers Association of America (PCI).

“Once Oregonians were educated about Measure 42, voters clearly chose to have their exposure for loss accurately reflected in the price they pay for insurance,” said Ken Gibson, vice president, state affairs, American Insurance Association (AIA),. “Voters said yes to personal responsibility, yes to riskbased pricing and no to mass subsidization.”

“Insurance consumers, who manage their finances responsibly, drive responsibly and/or operate their businesses responsibly, deserve to receive the benefit of that responsible behavior through lower insurance rates. Forcing these consumers to subsidize the rates of other consumers is unfair, and inconsistent with the public policy objective of encouraging insurance consumers to be proactive
personal risk managers,” said Rand Christian John Rataj, western state affairs manager, National Association of Mutual Insurance Companies (NAMIC).

Oregonians Against Insurance Rate Increases was supported by a coalition of individuals, businesses and community organizations – including the Oregon Farm Bureau, the National Federation of Independent Business and the Oregon State Chamber of Commerce.

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