On a vote of 26 to 39 the House defeated HB 1143, which would have prohibited an insurer from using credit information as a factor for the acceptance, denial, renewal, or rating of a potential insured for insurance underwriting purposes in connection with property and casualty insurance.
“This legislation runs counter to an established body of research which demonstrates that credit-based insurance scores are very closely related to the risk of loss,” said Kelly Campbell, regional manager and counsel for PCI. “Studies have found that drivers with the best credit are involved in fewer accidents. The use of credit information helps to make the price of insurance better match the risk of loss posed by the consumer. As a result, on average, lower-risk consumers will pay lower premiums.”
Colorado already has a law that restricts the way insurers use credit information and it contains some of the strongest consumer safeguards in the nation. The Colorado law is in the mainstream of how other states govern the use of credit information.
“When purchasing insurance coverage, consumers simply want a fair price that relates to the risk they represent,” said Campbell. “Credit information along with a variety of other factors, such as years of driving experience, previous crashes, and the age of the vehicle, help insurers more accurately gauge the risk characteristics of each consumer.”
PCI is composed of more than 1,000 member companies, representing the broadest cross-section of insurers of any national trade association. PCI members write over $194 billion in annual premium, 40.1 percent of the nation’s property/casualty insurance.