Insurance Scoring Still a Concern

Insurance scoring remains a critical issue for agents, consumers and insurers alike. A recent Texas Department of Insurance hearing addressed proposed rules on credit scoring and territorial rating as part of the rulemaking process resulting from changes wrought by Senate Bill 14. The department intends to have those rules finalized by the end of the year at the latest, but a department spokesperson said they would likely be published in a final form before then.

In our “Parting Shots” column Richard Rambeck takes on the insurance scoring issue, expressing his amazement at the heavy-handed approach carriers still seem to favor when it comes to dealing with opposition to the use of credit history in rating policies. Rambeck points out that early on it was agents, not consumers, who alerted legislators and regulators to the potential pitfalls—including redlining—of the use of credit scores by insurers, some of which “hadn’t a clue what they were doing.”

The territorial rating issue is a concern to many insurers. In Kevin O’Reilly’s feature story on regional carrier, Old American County Mutual Fire Insurance Co., company president Tom McCall notes that county mutuals, which rate by zip code, could be greatly affected by the territorial rating rules. The county mutuals are seeking clarification on those rules, which go into effect Jan. 1, 2004.

The professional liability market has seen its share of ups and downs over the past few years, and as Insurance Journal West editor Cynthia Beisiegel acknowledges it looks like the bumpy ride is not yet over for that line. It seems that increasing claims against professionals such as lawyers, doctors, architects, real estate brokers, and even insurance agents and brokers have carriers entering and exiting the line at a rapid pace.

Kevin LaCroix, incoming president of PLUS, recognizes the transitional nature of the market. In an interview with Insurance Journal, LaCroix discusses how PLUS, in its upcoming conference, is working to help insurance professionals deal with the changes in the professional liability line. LaCroix also talks about the importance of education and communication among professionals in this sector of the industry.

Lucky Charles Boyle. Our international editor, and editor of Insurance Journal East, not only had the pleasure of going to Rome for the Federation of European Risk Management Associations (FERMA) conference, he was one of the invitees to a reception at the Capitoline Museum sponsored by XL Capital. He and the rest of the attendees were treated to a “guided tour of the finest collection of Roman antiquities in the world.” In his coverage of the conference, Boyle explains how European risk management issues compare with the concerns of U.S. risk managers.

In this issue, Boyle also examines the world of reinsurance. Boyle found that the ratings agencies, like A.M. Best and Standard & Poors, are not only offering insight into the industry, they are increasingly influencing its direction for the future.

Topics Agencies