While the Washington Insurance Department has received a lot of attention over the past several months because of Commissioner Kreidler's position and orders on credit scoring, Washington is not the only state to take the same stance.
The Maryland Insurance Administration issued a bulletin yesterday reminding all P&C insurers that the use of credit scores when underwriting or rating homeowners or auto insurance is prohibited by state statute.
For homeowners policies, the use of credit is prohibited as a rating factor as is mortgage-related information and the insured's premium payment history, even if the payment history is in the insurer's records.
For auto policies, an insurer may not refuse to underwrite, cancel, nonrenew, increase the renewal premium or require a particular payment plan based in whole or in part on an individual's credit. An insurer may use credit to rate a new policy of auto insurance. Beyond that the use of credit in rating is prohibited. Insurers using credit to determine premium for a new policy must review credit every two years or sooner at the insured's request, and adjust the premium accordingly if there has been an improvement in the person's credit.
Insurers that are using credit in any way other that what is allowed are instructed to contact the department: [email protected] / 410.468.2353 to discuss steps to bring the practice into compliance with the regulations. A copy of the order can be found here.