CONSUMER GROUPS KNOCK MICH. INSURERS’ ‘DISHONESTY’ ON CREDIT SCORING:

Two consumer advocacy groups released a statement criticizing Michigan auto and homeowners insurers for “false statements” about insurance credit scoring and Gov. Jennifer Granholm’s proposed regulation to ban the practice. The insurers criticized Office of Financial and Insurance Services (OFIS) Commissioner Watters for stating that the proposed ban on credit scoring will lower base rates with the new rule—at the same time the insurers are claiming that consumers will lose their discounts. Brian Imus, a lobbyist with the Public Interest Research Group in Michigan (PIRGIM) called industry lobbyists’ statements “breathtaking” in their falsehood, and said that Commissioner Linda Watters’ argument that banning the practice would reduce rates is “precisely correct” because “credit scoring is essentially a zero-sum game.” The Austin, Texas-based Center for Economic Justice (CEJ), meanwhile, argued that insurers’ use of credit scoring “is clearly prohibited by current Michigan law.” Imus said the two groups welcomed any legal challenge of the rule by insurers, which he said were sure to fail. Birnbaum, meanwhile, praised Granholm’s “political courage” for standing up to the “fearsome” financial and political power of the insurance industry.

Topics Carriers Legislation Michigan