Insurers Speak Out Against NAIC Credit Scoring Data Call

NU Online News Service, Sept. 30, 3:58 p.m. EDT

Insurers and trade groups objected to a planned National Association of Insurance Commissioners' (NAIC) data call on credit-based insurance scoring during a recent NAIC committee hearing.

At the NAIC Property and Casualty Committee public hearing held today, Neil Alldredge, senior vice president for state at political affairs at the National Association of Mutual Insurance Companies (NAMIC), said his association "is completely opposed to this data collection exercise developed by the NAIC. Simply, it is too expansive, costly and misguided to justify."

The NAIC has said that the information gathered will be used for public policymaking but the Property Casualty Insurers Association of America (PCI) said that kind of repository already exists in various private and public studies on the use of credit scoring in underwriting. The trade association also has confidentiality concerns.

"We do not feel the information garnered from this data call--even if it could be accurately aggregated--adds in an appreciable way to the existing body of studies," said Alex Hageli, PCI's director of personal lines.

The data call "certainly does not add enough to justify the massive expense insurers will incur in replying to the data call, which ultimately harms consumers," Mr. Hageli added.

NAMIC said there have been 19 studies on the different uses of credit scoring and each came to a similar conclusion--that credit-based insurance scoring is a valuable and fair tool in underwriting.

The Heartland Institute submitted testimony written by policy advisor Lawrence S. Powell to point out that credit scores "are clearly indicative of risk," adding that he thinks the data call is "more extensive than necessary for achieving its objectives."

The National Conference of Insurance Legislators (NCOIL) has urged the NAIC to get behind its credit-based insurance scoring model law, which has been adopted in 27 states.

Comments

Resource Center

View All »

Leveraging BI for Improved Claims Performance and Results

If claims organizations do not avail themselves of the latest business intelligence (BI) tools, they...

Top 10 Legal Requirements for E-Signatures in Insurance

Want to make sure you’ve covered all your bases when adopting e-signatures? Learn how to...

Get $100 in leads with $0 down!

NetQuote's detailed, real-time leads have boosted sales for thousands of successful local agents across the...

The Growing Role of Excess & Surplus Lines in Today’s...

The excess and surplus market (E&S) provides coverage when standard insurance carriers cannot or will...

Increase Sales Conversion with this Complimentary White Paper

This whitepaper will share proven techniques - used by many of the industry's top producers...

D&O Policy Definitions: Don't Overlook These Critical Terms

Unlike other forms of insurance where standard policy language prevails, with D&O policies, even seemingly...

Environmental Risk: Lessons Learned from Willy Wonka and the Chocolate...

Whether it’s a chocolate factory or an industrial wastewater treatment facility, cleanup and impacts to...

More Data, Earlier: The Value of Incorporating Data and Analytics...

Incorporating more data earlier in claims lifecycles can help you reduce severity payments by 25%*...

How Many Of Your Clients Are At Risk Of Flood?

Every home is vulnerable to flooding. Learn four compelling reasons why discussing flood insurance with...

Gauging your Business Intelligence Analytics Capabilities and the Impact of...

Big Data, Data Lakes and Data Swamps, How to gauge your company's Big Data readiness....

Personal Lines Pro eNewsletter

Critical insights into the personal auto, homeowners, and other consumer insurance markets to help P&C professionals stay informed – FREE! Sign Up Now!

Advertisement. Closing in 15 seconds.