NU Online News Service, April 2, 11:55 a.m.EDT

The Maryland legislature has rejected legislation that wouldhave imposed an outright ban on the use of credit information inrating automobile insurance.

Committees in both Houses of the Maryland legislature declinedto report such legislation to the full chambers.

Both the Senate Finance Committee and the House Economic MattersCommittee rejected the bills, according to officials of theProperty Casualty Insurers Association of America.

Maryland already has one of the most restrictive laws in thecountry regarding an insurer's use of credit information inunderwriting and rating for homeowners and auto insurance,according to Richard Stokes, a PCI counsel.

Currently, Maryland prohibits homeowners insurers from usingcredit information in underwriting or rating. The law alsoprohibits private passenger automobile insurers from using creditinformation for underwriting, but allows such information in ratingnew policies within 40 percent rate collars–either a surcharge ordiscount of up to 40 percent, he said.

The proposed bills would have gone even further and repealedprovisions of Maryland's law authorizing insurers to use creditinformation to rate a new automobile insurance policy, he said.

"The fact that both committees opposed the bill so stronglyshould be evidence that further efforts to curtail the use ofcredit information would be harmful to Maryland drivers," Mr.Stokes said.

He added that PCI plans to oppose any future efforts to restrictthe use of this highly accurate underwriting tool, which, he said,"ultimately benefits most insurance consumers."