Agents’ Credit-Based Insurance Score Bill Introduced in Missouri

A bill supported by some Missouri insurance agents that puts certain restrictions on how insurance companies use credit-based insurance scores has been introduced in the House.

National Association of Independent Insurers (NAII) Counsel Ann Weber said NAII has been working with the Missouri Association of Insurance Agents (MAIA) to develop wording that will be acceptable to all concerned. That effort has been only partially successful to date.

“The major point that should always be kept in mind is that using credit-based insurance scores enables many insurance companies to offer coverage to more people and at a lower cost to most of them,” Weber asserted. “Anything that impairs an insurer’s use of those scores, or adds unnecessary and time-consuming steps in the process, deprives their customers of the benefits of this very useful and accurate tool for predicting future insurance claims.”

One point of disagreement is that the agents’ bill (House Bill 1502) as introduced would require an insurer to provide an applicant, policyholder or agent, upon their request, with a “detailed explanation of the primary factors in their credit report that negatively impacted the credit score and actions the insured can take to improve the credit score.” The insurers’ proposal would have required them to provide the customer or applicant so affected, upon their written request, with a “description of the primary elements, criteria or categories of credit information that contributed to the adverse action.”

Another difference is that HB 1502 would prohibit an insurer from taking any adverse action based on “a credit report that the insurer knows to be in dispute. And if the insurer takes adverse action based on inaccurate credit information that is subsequently corrected, “the insurer shall re-underwrite any impacted contract and refund any premium decrease to the insured retroactive to the inception date of the contract.”

On that point, insurers proposed prohibiting an adverse action “based on information that is the subject of a recorded written dispute between the policyholder or applicant and a credit-reporting agency, as noted in such person’s credit report.”

Weber said those two provisions in HB 1502 would impose responsibilities on insurers that would be time-consuming and costly, thus undermining some of the value of using insurance scores. She urged that insurers’ hands not be tied in such a manner.

Topics Carriers Agencies Missouri