COLORADO SENATORS KO CREDIT BAN:

By a 5-2 bipartisan vote, members of the Colorado Senate Business, Labor and Technology Committee rejected a measure that would have banned insurers from using credit history to underwrite and rate automobile and homeowners insurance policies. The action by Colorado lawmakers will set the tone for a renewed debate on the issue in many state legislatures in 2005, according to the president of the Property Casualty Insurers Association of America. PCI has spearheaded efforts in Colorado and across the nation to enact laws that allow insurers to use credit histories. Colorado lawmakers passed such a law in 2004, which authorizes the use of credit histories but requires companies to notify applicants for insurance that credit information will be used for underwriting or rating, and prohibits insurers from denying, canceling or nonrenewing policies solely on the basis of credit information. The law mandates that insurers must provide consumers with reasons for any “adverse action” taken as a result of their credit history and protects consumers from adverse actions based on medical collections, identity theft or the negative credit information of a former spouse. The Colorado House Business Affairs and Labor Committee is scheduled to consider a bill that would ban insurance scoring on Jan. 31. Over the past four years, approximately 20 states have enacted laws similar to Colorado’s that allow insurers to use credit histories.

Topics Colorado