Mo. Committee Approves Credit-Based Score Bill After Adding ‘No Hit’ Provision

The state House Insurance Committee approved House Bill 1502 March 6 restricting the use of credit-based insurance scores in Missouri.

The committee amended the bill to prohibit insurers from taking an adverse action against a customer or applicant based solely on that person’s failure to have an established credit rating, often referred to as a “no hit.”

National Association of Independent Insurers (NAII) Counsel Ann Weber said NAII is continuing to work with insurance agents, the prime movers behind HB 1502, to develop a bill that would meet their intent while still allowing insurers to continue to use the scores to the benefit of consumers. NAII is concerned about the “no hit” provision as well as other aspects of HB 1502.

“The important point to bear in mind,” Weber said, “is that anything that impairs insurers’ use of insurance scores deprives most consumers of the benefits of this very useful and accurate tool for predicting future insurance claim behavior.

“Insurance scores help ensure that consumers pay premiums that reflect their risks, and therefore are fairer to everyone. The majority of consumers, who have good insurance scores, then are not forced to subsidize people who are higher risks.”

Weber said efforts are expected on the House floor to incorporate within HB 1502 provisions of HB 1821, a more restrictive bill that is supported by Gov. Bob Holden and the state Insurance Department.

NAII objects to the “no hits” provision, she said, because statistics show that, as a group, people with little or no credit histories do submit more and higher insurance claims.

Topics Missouri