Alliance Rages At Maryland Credit Score Vote
By Daniel Hays
However, The Alliance of American Insurers' charge, that the House Committee on Economic Matters had voted behind closed doors, was immediately denied by a committee staff member.
Nancy Earnest, assistant to Committee Chairman Michael Busch, D-Annapolis, said the vote was taken in open session, but that a preliminary session had barred industry lobbyists.
"We didn't want people in there lobbying while the insurance commissioner was briefing the committee," Ms. Earnest said. Later, because a trooper remained posted outside the door, "it may have given a misimpression," she noted.
According to Ms. Earnest, press and public were present for both the briefing and a vote later.
The Alliance said the measure that was passed, H.B. 521, "would do a great disservice to insurance consumers in the state by banning the use of credit scoring."
The bill, the Alliance noted now contains amendments that ban the use of credit scores by property-casualty insurers for underwriting and rating purposes.
"As troubling as the actual language of the bill, is the closed-door nature of this committee's action," said Neil Malady, Alliance Mid-Atlantic regional manager.
"I do not know of any other jurisdiction in the United States that holds 'private' voting sessions on public documents. I believe this action magnifies the fact that the bill's ban on the use of credit scores is based upon flawed logic. The debate on this issue has become intensely emotional, severely hampering insurers' factual arguments."
Mr. Malady said the House committee vote took place immediately following a closed-door meeting with Maryland Insurance Commissioner Steve Larsen, whose own Senate measure, S.B. 157, also was before the committee, but wasn't acted upon.
Mr. Larsen's bill, he said, continues the current requirement that underwriting and rating decisions not be based "solely" on credit scores for private passenger auto and extends its scope to homeowners.
The Senate bill also calls for the commissioner to conduct a study of how use of credit scores affects insurance availability and affordability.
"The current figures, [which] Commissioner Larsen is basing his opposition to credit scoring on, come from very limited studies of two ZIP-codes in Baltimore," Mr. Malady said. "I am confident that a well-balanced, broader-based study will prove insurers' claim that use of credit scores is both an effective predictor of risk and that they impact insurance consumers in an evenhanded manner."
Mr. Malady noted that he "expected the full House to take up H.B. 521 and pass it shortly."
The Alliance of American Insurers is based in Downers Grove, Ill.
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