Regulators Continue to Voice Concerns on Credit Scores

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).

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About the Author: Laura M. Wall

Laura Wall represents clients in complex civil litigation, class actions and arbitration proceedings in the insurance and financial services industries in federal and state courts. Laura has worked on matters involving the Racketeer Influenced and Corrupt Organizations Act, the Fair Labor Standards Act, and the False Claims Act. Laura also has experience advising insurance company clients with respect to federal and state laws and regulations, such as data breach notification laws and insurance producer licensing requirements. Read Laura's full bio on the Faegre Drinker website.

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