NAIC May Craft A CLUE Restrictions Law

By Steve Tuckey

NU Online News Service, Dec. 7, 3:28 p.m. EST, NewOrleans?A National Assn. of Insurance Commissioners panelwill explore developing a model law to regulate use of claimshistory data bases for rating applicants and writing homeownersinsurance.[@@]

Oregon applicants administrator Joel Ario announced the move ata session of the Market Regulation Committee yesterday duringNAIC's winter meeting here. His words surprised industryrepresentatives who had not prepared comments on the matter.

Mr. Ario said he might prepare a draft model for discussion atthe spring meeting in March, but stressed that no decision has beenmade on whether or not to go forward with the process.

For the past several years consumer representatives and realestate interests have raised questions about data bases such asChoicepoint's Comprehensive Loss Underwriting Exchange. They accuseCLUE of using criteria of questionable relevance in bothunderwriting and rating home insurance.

Last fall members of the National Conference of InsuranceLegislators considered one such model law proposal, but put it offpending further revisions for discussion at their springmeeting.

At the time industry representatives asserted the proposed billwent beyond regulating use of the data bases and severely limitedtheir use of loss history in underwriting and rating homeownersinsurance.

"The uses of the data base do get you into questions of ratingand underwriting," Mr. Ario said.

Backers of the model said that with more than 30 states eitherhaving imposed regulation or considering doing so, the time wasripe to propose model legislation to provide the uniformity theindustry has been crying out for in recent years.

Mr. Ario said one issue sure to be raised is that of the use ofmere inquiries to insurance agents on loss history records.

"Beyond that, you get into more controversy about what kind ofentries should or should not be used in the data base," Mr. Ariosaid.