Concerns over the use of credit history in the insurance industry have been on regulators’ radar for some time, and economic uncertainty and increasingly widespread calls to address income inequality and systemic racial discrimination have made the issue all the more timely. Amid this backdrop, Washington Insurance Commissioner Mike Kreidler has asked the state legislature to introduce legislation to amend current law in order to discontinue the use of credit-based insurance scores, which he calls unfair and discriminatory.
However, concern over the use of credit history and credit scoring in the insurance industry has been on the radar of regulators for a while. There have been various attempts in the past to modify both state and federal law on the issue. For example, in February of this year, the Oklahoma legislature introduced House Bill 3007 , which would prohibit the use of credit information to underwrite or rate risks, among other things. In 2019, a bill was introduced in the U.S. House of Representatives which specifically targets the use of consumer reports and consumer information in the auto industry. H.R. 1756, 116th Cong. (2019) (Preventing Credit Score Discrimination in Auto Insurance Act).
Read the full article on the Faegre Drinker website.