N.Y. GETS CREDIT SCORING LAW:

New York Gov. George Pataki has allowed a bill governing insurers’ use of credit scoring to become law without his signature. The bill is based on the industry-supported model developed by the National Conference of Insurance Legislators (NCOIL). Under the new law, insurers may continue to use credit-based insurance scores as a factor in underwriting and rating homeowners and auto insurance. But the new law prohibits the use of certain factors like income, address, zip code, race, religion, color, sex, disability, national origin, ancestry, or marital status. It also requires insurers to disclose the use of insurance scores, and to provide written notification if credit use results in a negative action. Insurers must also file their scoring models with the department. Nineteen other states have adopted the NCOIL model. “This bill was by far preferable over other legislation which would have established an outright ban on credit use, ” commented Donald Cleasby, assistant vice president for the Property Casualty Insurers Association of America. Agents also praised the new law. “This bill will enact significant consumer protections to ensure that insurance companies use credit information accurately and fairly for New Yorkers who buy homeowners, rental and auto insurance,” said T.J. Derella, president of the Professional Insurance Agents of New York. Derella also urged lawmakers to extend the protections to commercial lines. This suggestion has yet to be addressed in Albany.

Topics New York Legislation