Indiana's recently-appointed Republican insurance commissioner has pleased insurers by revising the rules for carriers' use of customer credit records for rating purposes.
Commissioner Jim Atterholt has issued Bulletin 130 that says that insurers must consider factors other than credit in taking any underwriting action. But there does not necessarily have to be any change in another factor for an underwriting action to be permitted.
Indiana originally passed credit scoring legislation in 2003 based on the model drafted by the National Conference of Insurance Legislators which has the support of the insurance industry.
But soon after passage of the law, then Commissioner Sally McCarty, a Democratic appointee, issued Bulletin 123 that said in order for insurers to take an underwriting action there must be a change in a second factor, no matter how dramatic a change there was in the credit score.
Mr. Atterholt was appointed earlier this year by Republican Gov. Mitch Daniels, who ousted Democrat Joe Kernan in the 2004 election.
The Indianapolis-based National Association of Mutual Insurance Companies had pushed hard to revise Bulletin 123 to make the "sole use" provision less restrictive.
"Commissioner Atterholt's action makes Indiana consistent with all the other states' interpretation of the term 'solely' that have passed the NCOIL model," said Tami Stanton, NAMIC's state affairs manager.
Mr. Atterholt said the issue has been settled. "As long as the market is competitive, I do not feel the use of credit should be discouraged or encouraged by the Department of Insurance," he said.
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