Insurers are weighing the ramifications of a directive filed by the Arkansas Department of Insurance that amends the requirements for insurers using credit-based insurance scores for personal lines ratings and underwriting.
“The insurance industry has worked closely with the Arkansas DOI on this issue, and we’re confident that we can continue that work to develop a satisfactory compromise between consumers, the DOI and the insurance industry,” said Jim Taylor, counsel for the National Association of Independent Insurers (NAII).
The Amended Requirements for Insurers Using Consumer Reports or Credit Scoring contains definitions on consumer reports, applicants, and adverse action.
Among its provisions, the directive prohibits insurers from refusing to issue, renew or limit coverage based solely on credit information, and also establishes consumer notification provisions about the use of credit scoring.
In addition, the directive requires forms and credit scoring information to be filed with the Department of Insurance, and requires the DOI to keep consumer report scoring systems confidential.
NAII will be meeting with the Arkansas DOI to review the directive and discuss any areas of concern which may exist, including the implementation date, Taylor added.
“The fact that legislators just adopted a credit scoring model act at the annual NCOIL meeting is a positive indication that lawmakers, regulators and the industry can find common ground on the credit issue,” Taylor said. “When it’s done responsibly, the use of credit scoring creates a competitive market where insurers write more business and most consumers reap the benefits by paying less for insurance.”
Was this article valuable?
Here are more articles you may enjoy.
The Battle Over J&J’s Bankruptcy Plan to End Talc Lawsuits 
Beryl’s Remnants Spawned 4 Indiana Tornadoes, Including an EF-3: NWS 
Surplus Lines Commercial Growth; Fla. Litigation Costs Reach New High in 2023 
Marsh McLennan Agency to Acquire The Horton Group 
