NEW YORK--The National Conference of Insurance Legislators (NCOIL) Property-Casualty Insurance committee has voted to approve a resolution supporting the state regulation of the use of credit information in insurance.

The resolution passed Friday on a voice vote with no opposition.

The resolution responds to two bills under consideration by the U.S. House of Representatives, H.R. 5633 and H.R. 6062, that NCOIL said would encroach on an area of regulation reserved for the states.

In the resolution, NCOIL states that it "opposes federal legislation that would restrict a state's lawmaking ability regarding use of consumer credit information--as such federal legislation would infringe on states' well-established authority to oversee the business of insurance and would disregard legislatures' ability to determine what is best for their individual states."

NCOIL also points to its 2002 Model Act Regarding Use of Credit Information in Personal Insurance, which "[regulates] the use of insurance scoring so that consumers would be afforded certain protections with respect to the use of their credit data."

Twenty-six states, NCOIL said, have adopted legislation and/or regulation based on the NCOIL model act. Forty-eight states have laws that regulate the use of credit information for insurance purposes.

Joe Thesing, director of state affairs for the National Association of Mutual Insurance Companies, said the resolution would "send a message to Congress that they should not pursue efforts to ban this very valuable underwriting tool." Mr. Thesing urged the committee to pass the resolution.

Deirdre Manna, vice president of industry, regulatory, and political affairs for the Property Casualty Insurers Association of America (PCI), issued a statement supporting the NCOIL action.

"The NCOIL insurance scoring model act, adopted in 2002, was one of the most positive developments in the insurance scoring debates. State legislators and insurance regulators across the country used the NCOIL model as a way to implement reasonable regulation of insurance scores.

"The success of this model makes it unnecessary for Congress to intervene with H.R. 5633 and H.R. 6062, which would amend the Fair Credit Reporting Act (FCRA) to prohibit the use of consumer information in connection with the underwriting or rating of personal lines of insurance."

The NCOIL resolution states that "NCOIL will distribute this resolution to state and federal leadership, as appropriate, and to the Federal Trade Commission (FTC) following the 2008 NCOIL Summer Meeting."

Special Reports /

NCOIL Reaffirms State Regulation Of Insurance Scoring

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