Insurers Look To Demystify Credit Scoring

The National Association of Insurance Commissioners will again consider insurer use of credit scoring at its winter national meeting this week in Chicago. This action comes on the heels of several states, most notably Florida and Georgia, holding hearings on the issue.

The NAIC considered this issue in the not-too-distant past. The organization's Market Conduct and Consumer Affairs Subcommittee issued a "White Paper on Credit and Underwriting" that was adopted in 1997. It debated the pros and cons of using credit profiles to predict insurance risk and concluded with general recommendations for regulatory control. It clearly did not advocate prohibitions on insurer use of credit information.

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