Oregon residents will vote next month on whether to ban the use of insurers' use of credit records to set rates for personal lines customers.
The insurance industry has lined up against the proposal, ballot Measure 42, which is sponsored by conservative tax activist Bill Sizemore and backed by the Consumers Union as well as some insurance agents' groups.
Among the opposition is the Property Casualty Insurers Association of America (PCI). Lynn Knauf, a spokeswoman for the group, said the measure "is so broadly written that it could lead to a myriad of unintended consequences."
Because of its vague language, it could adversely impact all lines of commercial insurance, including liability lines, workers' compensation and umbrella policies, she said.
The measure would expand the state's current law that limits the use of credit scores to lowering rates for a policyholder.
An insurer can now use credit information through the first 60 days of a new policy to determine whether it will provide coverage or adjust a premium. But it can only be used in conjunction with other factors.
According to the Oregon Insurance Division, more than 90 percent of carriers use credit scoring in their underwriting practices.
Christian Rataj, state affairs manager for the National Association of Mutual Insurance Companies, said that polling conducted by an anti-initiative coalition indicates that consumers generally support the measure to ban credit scoring, but also don't like the idea of having to subsidize insurance consumers with poor credit.
Opponents paid for a survey and supplied insurance data that was published Friday reporting that Oregon residents pay $115 less for auto insurance and $60 less for homeowners insurance if they have good credit.
Mr. Rataj said insurers are concerned that passage of Measure 42 could lead national advocacy groups that oppose the use of credit scoring to sponsor similar measures in other states.
While Oregon remains the sole state with a credit scoring initiative, the industry is keeping a sharp eye on the Michigan Court of Appeals, hoping it will uphold a lower court ruling voiding a credit scoring ban by the Michigan Office of Financial and Insurance Services.
A ruling is expected shortly, according to Ms. Knauf.
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