The Arkansas insurance regulator said her department will join with 12 other states to ask the U.S. Supreme Court to uphold a lower court's ruling on the use of credit scores by insurers.
Arkansas Insurance Commissioner Julie Benafield Bowman said on Thursday that Arkansas was joining with the other departments in an amicus curiae (or friend of the court) brief that asks the Supreme Court to uphold a Ninth Circuit Court of Appeals ruling that GEICO and Safeco willfully violated the Fair Credit Reporting Act (FCRA) by not properly notifying consumers when their credit score negatively affected their auto insurance rates.
According to Ms. Bowman in a statement, the states filed their brief to "further their collective mission of protecting consumers by supporting interpretations of the FCRA that put valuable information in the hands of consumers; provide appropriate incentives for insurance companies that use consumer credit information to adopt procedures that assure compliance with the law, and hold insurance companies accountable when they adopt policies that recklessly disregard consumer rights in contravention of the FCRA."
Ms. Bowman said that she felt joining the other states in filing the brief was an important step, and that all consumers should know if their auto insurance rates are increased because of something in their credit score.
State attorneys general are also seeking to add their interpretations of the law to the debate on credit scores and how they affect rates.
Oregon's Attorney General Hardy Myers, joined by 21 other states, filed an amicus brief arguing that the insurers did not correctly interpret the law, said an Oregon Department of Justice spokeswoman by e-mail.
The brief filed by the state of Oregon argues that the insurers erred by notifying only those consumers with below-average credit ratings that those ratings could lead to an adverse action against them. According to the spokeswoman, the Attorney General argues that all consumers should be notified.
Consumers with above average credit ratings should be given the same opportunity to review and correct any inaccuracies in their credit rating, and thus potentially become eligible for even more savings from their insurers, according to the spokeswoman. Without that opportunity, the states conclude, those consumers are being adversely affected.
The Ninth Circuit Court issued it's ruling in the case in January 2006. The Supreme Court agreed to take up the case in September. Oral arguments are scheduled to be heard on Jan. 16.
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