WASHINGTON–Credit scores are an “effective predictor” of risk under automobile insurance policies, the Federal Trade Commission says in a report, an advance copy of which was obtained by National Underwriter.

Industry trade groups, who also have had an advance look, hailed the findings, with officials of the National Association of Mutual Insurance Companies saying, for example, “that the report confirms what the industry has been saying all along–that credit-based insurance scores provide an objective and reliable tool” for setting insurance rates.

Opponents of the technique in the past have argued that it unfairly impacts low-income and minority groups, and fails to account for those who deal in cash or are impacted by one-time events such as medical emergencies.

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