InsurersÃ¢â‚¬â„¢ use of credit scoring and its impact on consumers will be the subject of a public hearing to be held tomorrow by the National Association of Insurance Commissioners (NAIC) in Arlington, VA. The hearing will focus on three key issues: an explanation of what constitutes a credit-based insurance score; an explanation of how insurers use credit-based insurance scores; and a discussion on how current economic conditions have affected policyholder premiums related to credit-based insurance scores. Dr. Robert Hartwig,Ã‚ president of the Insurance Information Institute (I.I.I.)Ã‚ will be among those giving testimony at the hearing. Check back on the I.I.I. Web site for a copy of Dr. HartwigÃ¢â‚¬â„¢s testimony. Check out further I.I.I. information on credit scoring.
The Federal Trade Commission (FTC) decision to order nine homeowners insurers to provide information on the use and effect of credit-based insurance scores in homeowners insurance is a reminder of the continuing need for insurers to explain why they use credit information in personal lines underwriting and exactly how it works. The FTC is seeking the data to complete a study of credit-based insurance scores and homeowners insurance, as required by the Fair and Accurate Credit Transactions Act of 2003. Insurance Information Institute (I.I.I.) background information on credit scoring is available online. The following responses to the FTC have been issued by the American Insurance Association (AIA), the Property Casualty Insurers Association of America (PCI) and the National Association of Mutual Insurance Companies (NAMIC).Ã‚