NU Online News Service, March 29, 3:38 p.m.EDT

DENVER–Consumer representatives again made their caseto insurance regulators about perceived inaccuracies regardinginsurers' use of credit-based insurance scores as a factor indetermining rates.

Their comments came at the National Association of InsuranceCommissioners (NAIC) Spring National Meeting held here.

Sonja Larkin-Thorne, a Connecticut-based consumer advocate whoformerly worked in the insurance industry, argued during theNAIC/Consumer Liaison meeting that even lenders are now beginningto question the accuracy of credit scores after the large numbersof recent defaults.

She noted a USA Today report last year that consumerswho have never been late on payments are being hit with lowercredit scores as lenders react to the economic downturn by closingcredit card accounts and reducing limits.

Ms. Larkin-Thorne said if credit scores can drop even forconsumers who have made no late payments and done nothing wrong,then that raises questions on whether the credit scoring model isflawed.

Pointing out how the current recession has impacted creditscores, Ms. Larkin-Thorne said that between the 2007 fourth quarterand the 2008 fourth quarter, median credit scores in the U.S.dropped five points.

Certain regions, though, have been hit harder, she noted. Shesaid Riverside, Calif., for example, has seen median scores drop 17points in that time. Scores also dropped 14 points in Phoenix and12 points in Miami.

This data, Ms. Larkin-Thorne said, shows that credit scoresrepresent only a "point in time" and should not be relied upon asmuch as they currently are by lenders and insurers.

"Credit scores aren't as accurate as they used to be, but moreimportantly, maybe never were," Ms. Larkin-Thorne said.

David Snyder, American Insurance Association vice president andassociate general counsel, said while Ms. Larkin-Thorne'sstatistics may all be true, lending scores are not the same asinsurance scores. Insurance scores, he said, are calculateddifferently.

He said there is no evidence that insurance scores have droppedin the same manner as lending scores, and he noted that there hasbeen no rise in consumer complaints over insurance scores.

For their part, regulators intend to move ahead with a planneddata call in order to obtain accurate information on the practiceof credit-based insurance scores, Illinois Insurance DirectorMichael McRaith said at the NAIC's Property and Casualty Committeemeeting.

The information, he said, will be used to provide accurate datato federal and state lawmakers when necessary. The data call islisted in the proposed 2010 charges for the committee, and theproposed deadline for collecting the information is Sept. 2010.