Legislative action has been completed on a bill prohibiting insurers from charging a higher premium or declining to insure a person based primarily on his or her credit rating or history.
The House passed Senate Bill 1408 March 11 and sent it to Gov. Dirk Kempthorne for his consideration. The legislature is aiming to adjourn this Friday, March 15.
National Association of Independent Insurers (NAII) Northwest Regional Manager Michael Harrold said uncertainty as to how insurers must comply with the “primarily” language in SB 1408 could deprive most consumers of beneficial rates that they otherwise could get because of their credit-based insurance scores. The legislation also potentially could lead to lawsuits, he added.
“Uncertainty as to how to comply with this legislation may cause insurers to decide not to use insurance scores at all,” Harrold said. “That would be very unfortunate for most consumers who then would not get the lower premiums to which their favorable insurance scores would entitle them.
“Numerous independent studies and data compiled by insurers demonstrate conclusively that an insurance score is an extremely accurate tool for predicting the likelihood that a person will submit an insurance claim in the future. Insurers then can base their rates on actual risks involved. That is fairer for everyone.”
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