A North Dakota measure to ban insurers' use of credit data to set customers' premium rates appears to have little likelihood of passage, its sponsor conceded yesterday.
Under the measure proposed by State Sen. Tracy Potter, D-Bismarck, insurers would be barred from using credit information as a gauge for acceptance, denial, or renewal of personal insurance.
The bill (SB 2330) received a "do not pass" recommendation from the Senate Industry Business and Labor Committee when it was released from the committee on Tuesday for a floor vote.
Mr. Potter speaking about his bill said, "We did not make significant headway on the issue," and he does not expect it to pass if in fact it is even brought up for a vote.
The measure drew strong objections from insurance trade group representatives when they spoke before the committee.
Jeff Junkas, American Insurance Association spokesperson, said he expects that the current law related to credit scoring will remain in place, which he said is based on the National Conference of Insurance Legislators model statute, which many states have adopted and generally has insurance industry support.
The NCOIL model contains provisions designed to protect consumers such as giving them notice that credit will be a determinate in insurance process.
Insurers have argued that using credit scoring allows them to properly underwrite policies and without it an unfair cost burden could be made to fall on better risks. Opponents of credit scoring say it impacts most heavily on low income and minority customers and fails to take into account special circumstances such as an illness that creates heavy medical bills.
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