Credit Scoring Study Passes House Committee
By Steven Brostoff, Washington Editor
NU Online News Service, July 25, 3:20 p.m. EDT, Washington?The House Financial Services Committee last night approved legislation reauthorizing the Fair Credit Reporting Act that still contains a provision calling for a federal study of insurance credit scoring.
The legislation, H.R. 2622, was approved by a 61-3 vote. In addition to permanently reauthorizing FCRA, the legislation would provide consumers with greater access to their credit records and establish new rules aimed at combating identity theft.
However, industry representatives remain concerned by a provision that calls for a study by the Federal Trade Commission on the impact of insurance credit scoring on the availability of consumer credit.
Anne Sittmann, a representative of the Des Plaines, Ill.-based National Association of Independent Insurers, said that NAII opposes a federal study. First, she said, the insurance industry is regulated by the states and such a study is beyond the jurisdiction of the federal government.
Moreover, she said, existing studies demonstrate the link between credit scores and insurance underwriting.
Monte Ward, vice president of federal affairs for the Indianapolis-based National Association of Mutual Insurance Companies, said it is unsuitable for an agency without authority over insurance to be conducting a study.
Moreover, he said, in recent years the insurance industry has more fully utilized credit history as a predictor of future losses, resulting in substantial consumer benefits by allowing insurers to offer a better product to consumers.
© Arc, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to TMSalesOperations@arc-network.com. For more information visit Asset & Logo Licensing.