NAII Urges Utah To Revise Credit-Scoring Rule

NAII Urges Utah To Revise Credit-Scoring Rule

NU Online News Service, March 5, 1:05 p.m. EST?An insurer trade group contends that a Utah credit-scoring draft rule conflicts with a recently passed law permitting the use of credit reports in personal lines underwriting.

The Des Plaines, Ill.-based National Association of Independent Insurers is urging the Utah Department of Insurance to revise its draft rule on credit-based insurance scoring. The NAII is advocating allowing the use of this underwriting tool, as long as it is risk-related and factors other than credit information are considered.

The draft rule goes beyond the statute passed last year, according to the NAII. That law provides that insurers can use credit in initial underwriting and give a discount on private passenger automobile policies, if the credit information is used in conjunction with other factors.

However, the proposed rule states that insurers may not use credit information as the "primary" reason to decline or refuse to issue a new personal auto insurance policy.

"Our most important concern regarding the proposed rule is that it deviates so drastically from the clear intention of the legislature regarding the use of credit information," said Ann Weber, counsel for NAII.

"Using the term 'primary' creates a myriad number of problems in that it is difficult to define and it suggests that there is a weighing of factors," Ms. Weber noted. "In addition, the legislature considered the 'primary' limitation and decided against using that concept."